Property analysts expect rentals of shoebox apartments to fall by five to ten percent in the coming years, on the back of an expected increase in supply, reported the media.
Notably, around 6,200 shoebox units are slated to be completed over the next two years. This is a record number compared to the yearly average of 3,000 units during the last decade, said property consultant SLP International.
SLP noted shoebox units located near MRT stations or within the city centre would enjoy better rentals compared to others.
“Those shoebox developments that are located away from the city or MRT stations, I think they will not be doing very well in terms of their rental demand,” said Nicholas Mak, Executive Director of research & consultancy at SLP International.
“And furthermore, if they are located within the suburban areas where typically family units are in more demand, such developments may actually languish in the rental market,” he added.
Shoebox units are generally small apartments with a space of less than 50 sq m.