Prevalence of Shoebox Apartments

Mr Ang Wei Neng asked the Minister for National Development (a) what is the number of completed private small/shoebox apartments (of less than 700 sq ft) as of April 2012; (b) what is the expected supply of such apartments by 2015; (c) if he can give an update on the measures to ensure property developers provide show flats and marketing materials that accurately reflect the actual units, especially with regard to shoebox apartments; and (d) whether his Ministry will consider tightening the regulations pertaining to shoebox apartments.

Mr Khaw Boon Wan: Currently, there are about 2,500 units of completed shoebox apartments, defined as those which are less than 50 sq metres. They make up 1.2% of the 210,000 non-landed units in our private housing stock. About 80% of these completed shoebox units are located in the Central Region. They are mostly targeted at singles and expatriates.

Going forward, we expect the stock of shoebox units to increase to around 9,700 units by 2015. Unlike the existing shoebox developments, many of the new shoebox units will be located in the suburbs, in the heartlands. Presumably, the investors expect to be able to tenant out these units.

As for the Member's other question, the URA has amended the Housing Developers Rules to enhance transparency in the property market. From 18 May next week, all developers will be required to provide more information such as scaled unit floor plans and a breakdown of the unit floor area. This will enable prospective buyers to make better informed decisions.

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In addition, we will be amending the Housing Developers (Control and Licensing) Act to require developers who set up show-flats to depict the actual units accurately. The proposed changes will be implemented in the second half of this year if and when the Act is passed in Parliament. We are monitoring the trend of shoebox units in Singapore. If additional regulations are necessary, we will consider them.

Mr Ang Wei Neng: Sir, I thank the Minister for the reply. I am glad that after my PQ was filed on 9 April, MND went ahead to release more data on the shoebox apartments on 18 April. Even with the released data, the market is still hot on the shoebox apartments that are less than 50 sq metres. That was why the Minister commented on the shoebox apartments again on 2 May. Certainly the latest clarifications help, but the trend is still worrying. There was already an article in Lianhe Zaobao yesterday claiming that one of the buyers of the shoebox apartment lamented that he could not even bring in a single bed through the bedroom door of the shoebox apartment. So, we are glad that MND is looking at tightening the regulation so that show flats would reflect the actual size of the apartments, especially shoebox apartments, so as not to mislead potential buyers.

Does the MND keep track of the profiles of the buyers of shoebox apartments? And could the MND share how many of these shoebox apartment buyers are current HDB dwellers staying in HDB flats that are larger than 50 sq metres? If the Minister does not have the information in hand, I hope he can share with us at a later date.

Mr Khaw Boon Wan: Sir, I am for greater transparency, and where I have such information, I would release them either through press statements or posting a blog about it because I too share Members' concern about this trend of increasing number of shoebox units being built, particularly in the suburban areas.

We do not yet have a good breakdown on the people who have invested in these units but eyeballing some of the data that we have, it suggests that they are mostly Singaporeans with HDB addresses. So, obviously, they do not plan to stay there because they would not be able to fit into these 50 sq metres for a family of several members. It looks like they are investors, parking their funds there and expecting to be able to rent out because they must have seen shoebox units in the central region being able to be tenanted out relatively easily with reasonable yield.

But, as I said, the difference this time round is that most of the units are in the heartlands, where the market is untested. If I may use an analogy, it is like a ferry designed for a certain capacity. You know that if the ferry is overloaded with too many passengers, especially if it is sailing into shallow waters, it may sink. But because it is an untested water, untested market, it is hard for me to intervene in the market thinking that I know better than the developers or the investors. The minimum I can do is to alert everybody. I can see long queues going to board the ferry and my job is to share as much information as I can with the investing public as well as the developers. But we are watching it closely and if need be – if evidence is clear that we need to intervene – I will not hesitate to do so.