Minister Khaw urges caution on shoe-box units
With the recent emergence and demand for shoe-box units, the government is closely watching their development, said National Development Minister Khaw Boon Wan as he urged potential buyers to carefully weigh the benefits and risks of buying such property.
A shoe-box unit, common in countries such as Hong Kong and Tokyo, refers to an apartment usually smaller than 500 square feet. A three-room HDB flat is about 700 square feet.
In Singapore, the annual take-up of these very small units has increased from 300 units in 2008 to 1,900 units in 2010, or from 6 percent to 12 percent of developers' sales over the same period. Eighty percent of these buyers are Singaporeans.
More of these shoe-box units will be completed soon, noted Minister Khaw in his latest blog post. By 2014, there will be 3,800 units, up from 1,100 units.
There could be a further build up as developers who bid high prices for sale sites are planning to build shoe-box units, industry analysts and developers told Minister Khaw.
Newer shoe-box developments are also in the suburbs, with their appeal to tenants untested.
"Some analysts wonder aloud if buyers know what they are in for. Some have suggested that the government should step in to impose a minimum size," said the Minister.
"My instinct is not to second guess the market. Some shoe-box units do add to the diversity of housing options here. But we are closely watching its development."
The government also requires developers to give buyers an accurate representation of the units they are buying within the show flats and in the sales materials.
Analysts can also help by including a separate analysis for each category of housing products, said Minister Khaw.
Pointing out that Singaporeans are "house proud and we want our apartments to be cosy, comfortable and spacious", Minister Khaw cautioned, "A shoebox unit is not the same as a 3 room flat. So please go in with eyes open."
