As shoebox units have lower prices quantum and able to achieve high rental yield, these units are gaining polularity among potential buyers. Particularly, the increase in demand can be seen in the suburbs, according to a research report.
Shoebox units are defined as units below 50sq meters. During the 1st nine months of 2013, the OCR accounted for 53.3 percent of these shoebox transactions. There was a spiked in transactions in 3rd quarter 2013 due to J Gateway where 223 shoebox units were sold.
As shoebox units continued to increase in popularity, so has the increased in prices of the units. The average increase in the psf of shoebox units rise to $1,523psf. Prices of the most expensive shoebox units in the Central Core Region rose to $2,322psf. Analyst note that the gap between the central core units and the outer central core units have been narrowing. They have attributed this to buyers who are affected by the TDSR and are unable to afford Central Core units and hence looking at suburban units.
Analyst also note that shoebox units continue to generate higher yields on investment. Shoebox units generate an average of 4.8 percent return wherelse non-landed private homes generate 3.6% return. It is noted that demand for shoebox units might normalize as buying shoebox units become the norm.
Many potential buyers might be looking at The Hillford as it has quite a number of shoebox units. Moreover, the price for The Hillford will definitely remain affordable to many buyers as it is a 60 year lease condo