Post by oldman on Oct 19, 2013 9:00:49 GMT 7
3 years back, a developer bought the house behind mine and built a 41 unit apartment in our suburban neighbourhood within a short period of 1 year. The studio apartments occupy just 410 sq feet and this area includes a balcony and an aircon ledge! The 2 bedroom apartments are around 590 sq ft and the 3 bedroom ones are 880 sq ft. There are 4 two storey penthouses with around 1,200 sq ft but these include a relatively large open terrace upstairs. Amazingly, the condo was fully sold within a few months.
I actually expected this condo to be a hive of activity given the large number of units on a relatively small piece of land. But strangely, the condo remains relatively quiet even though owners started moving in 18 months ago. There are not many cars parked there. The condo has even installed those double decker car park mechanisms but I have not seen these in use yet as there is still ample parking even though I think that there is just one car park lot per apartment.
What these observations suggest to me is that a lot of these shoebox apartments remain empty. Many of the owners paid $1,200 psf when they bought these from the developers. Many of them may just be speculators as can be seen from the frequent for-sale and for-rent advertisements.
If this is typical of shoebox apartments in the suburbs, then most of the buyers may be speculators given that the studio apartment may cost less than $500K and most speculators would have taken the maximum bank loan. I am not surprised as it is really not easy to live in such small spaces when HDBs can offer much more space in more centralised location at much lower prices.
Interestingly too, of the cars that are parked there, many of these are new continental cars like BMWs and Mercedes. This suggests that those who choose to live in these shoe box apartments are probably from the younger generation. I think folks from the older generation will be more careful with money. If they stretch themselves to be able to live in an apartment, these older folks are unlikely to also stretch themselves for their cars.
Yes, there are a few foreigners in the condo who probably rented these apartments but these are few in numbers. Again, I am not surprised as the location is less than ideal for folks without a car.
It looks like speculators can only hope to sell to other speculators or to the young who may not be financially mature. But with our property market as it stands, I doubt many will be bullish enough to buy at higher levels. I think when the market corrects, these shoebox apartments in the suburbs may suffer the most significant fall in value... as the owners of this type of property may be very sensitive to significant falls in the price of their apartments given their loan exposures.
I actually expected this condo to be a hive of activity given the large number of units on a relatively small piece of land. But strangely, the condo remains relatively quiet even though owners started moving in 18 months ago. There are not many cars parked there. The condo has even installed those double decker car park mechanisms but I have not seen these in use yet as there is still ample parking even though I think that there is just one car park lot per apartment.
What these observations suggest to me is that a lot of these shoebox apartments remain empty. Many of the owners paid $1,200 psf when they bought these from the developers. Many of them may just be speculators as can be seen from the frequent for-sale and for-rent advertisements.
If this is typical of shoebox apartments in the suburbs, then most of the buyers may be speculators given that the studio apartment may cost less than $500K and most speculators would have taken the maximum bank loan. I am not surprised as it is really not easy to live in such small spaces when HDBs can offer much more space in more centralised location at much lower prices.
Interestingly too, of the cars that are parked there, many of these are new continental cars like BMWs and Mercedes. This suggests that those who choose to live in these shoe box apartments are probably from the younger generation. I think folks from the older generation will be more careful with money. If they stretch themselves to be able to live in an apartment, these older folks are unlikely to also stretch themselves for their cars.
Yes, there are a few foreigners in the condo who probably rented these apartments but these are few in numbers. Again, I am not surprised as the location is less than ideal for folks without a car.
It looks like speculators can only hope to sell to other speculators or to the young who may not be financially mature. But with our property market as it stands, I doubt many will be bullish enough to buy at higher levels. I think when the market corrects, these shoebox apartments in the suburbs may suffer the most significant fall in value... as the owners of this type of property may be very sensitive to significant falls in the price of their apartments given their loan exposures.