With initial signs that the shoebox craze may be subsiding, demand for larger non-landed homes appears to be on the upswing with upgraders leading the way.
Data from property consultancy CBRE shows that the median size of all new non-landed homes sold in Q2 2012 rose to 79 sq m, up from 65 sq m in the previous quarter.
At the same time, the market share of shoebox units measuring 50 sq m or less fell to 23 percent from a high of 28 percent. However, this figure is still more than last year’s 20 percent.
Experts noted that cooling measures such as the seller’s stamp duty (SSD) and additional buyer’s stamp duty (ABSD) could have contributed to the decline in investor demand for shoebox units. Such properties have been very popular due to their affordability, with most units priced below S$1 million.
Despite the renewed interest for bigger units at some executive condominiums (ECs) and private suburban projects, Joseph Tan, Executive Director (Residential) at CBRE, explained that “interest in small units will always be there, especially if the current trend of reducing average family size persists and homeowners continue to look for affordable smaller apartments”.
“It also depends on developers’ supply and pricing strategy; if prices are kept at an affordable quantum, investors will continue to view this as an attractive form of investment in view of the prevailing financial crisis,” he added.