LIVING LARGE: Bigger homes making a comeback after shoebox craze

LARGER-SIZED homes seem to be making a comeback, with upgraders leading the charge, amid tentative signs that the craze for shoebox units may be subsiding.

New figures show the median size of all new non-landed homes sold rose to 79 sq m in the second quarter, well up from 65 sq m in the three months before.

The market share of tiny shoebox units of 50 sq m or less sold also fell from a peak of 28 per cent to 23 per cent in the same period. Still, this second-quarter figure remains higher than the 20 per cent for the whole of last year.

While it is too early to say interest in smaller homes is definitely fizzling out, experts say cooling measures such as the additional buyers' stamp duty and sellers' stamp duty of up to 16 per cent might have put a dampener on investor demand for shoebox units.

These units have been popular among investors owing to their affordable price point - typically less than $1 million.

The interest in small units will always be there, especially if the current trend of reducing average family size persists and home owners continue to look for affordable smaller apartments.

It also depends on developers' supply and pricing strategy; if prices are kept at an affordable quantum, investors will continue to view this as an attractive form of investment in view of the prevailing financial crisis.

ERA Realty key executive officer Eugene Lim said buyers might be increasingly attracted to the value proposition of larger homes.

He said the per sq ft price of small homes can be up to 15 per cent to 20 per cent higher than that of larger ones even within the same project.

'The shoebox market seems to be taking a breather as people are more cautious now due to what is being said,' he added.

For instance, National Development Minister Khaw Boon Wan last month said the Government is monitoring the trend of shoebox units and would consider additional regulations, if necessary.

The bumper supply of completed shoebox units expected over the next few years has also been highlighted in recent reports.

Source: The Straits Times – 30 June 2012