Friday, May 4, 2012

Shoebox units pulling down value of new homes

Straits Times: Fri, May 04
THE dramatic rise of 'shoebox' units here, with their low total price tags, are causing a major drop in the value of new private homes in the pipeline.

The total value of uncompleted condominiums slid 22 per cent last year as these miniature homes rose to prominence, a recent property study found.

Property firm CBRE said the 13,611 caveats lodged for new homes amounted to $16.6 billion last year, a drop from the $21.2 billion in 2010, even though the number of caveats that year was only a little higher at 13,933.

CBRE said shoebox units, typically 500 sq ft or smaller, have lower price tags - even though the per sq ft price may be higher - and this is pulling down the overall value of home sales. As recently as 2008, these units were 'mostly found in city-fringe locations', but they have since proliferated widely.

The median size of new units has dropped from 1,249 sq ft in the third quarter of 2009 to 721 sq ft in the first quarter of this year...
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