Do Shoebox Apartments Make Sense? Series 2: A Closer Look At District 12

This blog post is part 2 of an ongoing series to understand if shoebox apartments make any sense. Is there a secondary demand for these units? Can you make money off these shoebox units? Series 2 will be examining these shoebox apartments at one of Singapore’s city fringe regions, Balestier. The same thing, comparison analysis follows the same rules set in part 1.

Comparison Of All 1 Bedroom Units Sold From 1st January 2018 to 24th October 2018 In District 12.

Source: URA. Shoebox Analysis District 12 Page 1/3. Units masked for privacy.

Source: URA. Shoebox Analysis District 12 Page 2/3. Units masked for privacy.

Source: URA. Shoebox Analysis District 12 Page 3/3. Units masked for privacy.

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1. The results are very similar with what was seen in district 19, location trumps timing when it comes to capital upside. There were only four projects with units sold below their original prices. These are Cradels(2 out of 7), The Viridian(1 out of 2), Vista Residences and Opal Suites. If you bought other projects during the same time, you would have made gains.

2. The highest ROI per year went to Parc Haven at 25.8%. 2nd place went at Neem Tree at 20% with a holding period of just three years. The ROI was higher than the 21.44% made by Kingsford Waterbay in district 19.

3. Large-scale developments like Eight Riversuites(862 units) tend to do better than smaller ones like Cradels(123 units). However, the Riviera 38(102 units) did outperform Cradels despite its size. All three were launched in 2012.

4. The highest registered loss was at Vista Residences with -4.6%. The loss was significantly lower than the -12.96% registered at The Waterline unit in district 19. Also, only a total of 6 units out of 109 units transacted in Balestier were loss-making. Comparing this with North-East region which had 11 out of 137 loss-making units.

5. Average ROI for District 12 was 8.34% compared to 7.16% for district 19.

6. Size does not matter. The 388sqft at Riverbay, 355sqft at Skysuites 17 and even the smallest 334sqft at Prestige Heights tell us that there is secondary demand for these units. Interestingly enough, there were also three units at Skysuites 17 which registered double-digit growth.

How does this compare to District 19?

On average, shoeboxes does seem to perform better in the city fringe area. The overall average ROI% was better in Balestier. The number of loss-making units was lesser in Balestier. Even the highest ROI came from Balestier. However, where you buy is still more important. As you can see from the results, some investments outside the central region can do better than those in the city fringe.

So moving forward, what makes a good buy? Is it more “safe” to invest in a shoebox in the city fringe? Or are there better buys out there? To understand more on the mechanics of how certain factors affect prices, do contact us for a free consultation before you purchase your next property.

Article contributed by Jerry Wong

Jerry Wong is a realtor with Huttons Asia Pte Ltd. He loves coffee, cookies and condos. Most importantly, he loves connecting people to properties and gets enormous satisfaction when they acquire their dream home or make that capital upside in just a matter of months. Buy Jerry a coffee, and he will meet up with you on a 1 to 1 session to share the following

  1. How certain factors affect real estate prices. (Using historical transactions as references)
  2. Applying lessons from history to determine if a condo has the potential for upside or not. These condos can be those under construction, resale or the very one you are staying in right now.
  3. Or just prepare the toughest question you have on your mind! If it is interesting enough, the answer will be in a blog post and shared with everyone!

You can also subscribe to our Facebook page and receive the latest real estate updates in Singapore!

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