Rentals of shoebox units could fall by five to ten per cent in the coming years due to an expected increase in supply, said property analysts.
Shoebox units are small apartments – they include one-bedroom or studio units and are often bought as investments.
About 6,200 shoebox units will be completed in the next two years. Property consultant SLP International said this is a record number – compared to the 3,000 units on average per year for the last decade.
SLP said shoebox units within the city centre or near MRT stations would command better rentals compared to others.
Nicholas Mak, executive director of research & consultancy at SLP International, said: “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.
“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.”
Source : Channel NewsAsia – 27 Dec 2014