New Curbs On Singapore Property Market.

Online, September 10, 2012 (Newswire.com) - Singapore will cap the number of small sized apartment units that can be built in suburban areas. These small sized apartment units are also called shoe box apartments and are generally smaller than 50 square meters (or 538 square feet).

The new rule will discourage "shoe box" developments outside the central area, but at the same time give developers the flexibility to offer different housing form to cater to the consumers' preferences and trends.

A combination of factors, such as growing population and increasing scarcity of land, have led enterprising developers to shrink housing space in a bid to reduce the cost of homes in the Singapore property market. In May 2012, Singapore government became concerned about the rising number of such shoe box apartments outside the core central area.

The government has raised several concerns in the rising numbers of shoe apartments. Besides ensuring that Singapore's scarce land resources are better utilized, it is also to prevent the addition stress to local road infrastructures when more units are built in areas that had been planned for.

However, in the central core areas of Singapore, where land prices are high, the government has excluded the curb on shoe box apartments, allowing market forces to dictate the relevant housing form.

With the additional controls on shoe box apartments, some experts believed that the demand for suburban shoe box apartment may better balanced by the rental demand for such unit types. Shoe box apartments will still enjoy advantages of lower price quantum and lower absolute rent compared to larger units. Foreigners coming to Singapore to work may find these units attractive because they are affordable.

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