Government to intervene in market for shoebox apartments

The number of units which can be developed on non-landed suburban private residential developments will soon be restricted, the Urban Redevelopment Authority (URA) said today.

From November 4, new guidelines to curb the development of shoebox units outside the central area will take effect.

The decision to impose guidelines on the development of shoebox apartments stems from the need to prevent a disproportionately large portion of small units in the housing market, URA said.

In a statement released on Tuesday, the authority added that it had been monitoring public feedback on the development of shoebox units in non-central areas of Singapore.

According to URA data, the number of shoebox units will increase by more than four times from 2,400 at the end of 2011 to about 11,000 units by the end of 2015.

In its survey, URA found that shoebox apartments were more popular among small households and singles and that their development is useful in meeting diverse lifestyle choices.

On the other hand, the smaller units are not conducive for couples with children and larger families.

The government has also observed that an increasing proportion of new developments consist predominantly of shoebox units. Some developments have a shoebox unit proportion as high as 80 per cent, the URA said.

Furthermore, strains on local road infrastructure could result from the excessive development of shoebox units in non-city areas.

Minister of National Development Khaw Boon Wan had on previous ocassions warned that the Government would not hesitate to intervene in the shoebox apartment market should there be any signs of unsustainable investor demand.

Commenting on the URA's new guidelines to curb shoebox unit developments, Mr Khaw said that although the regulators try not to intervene in the market, some intervention is needed if the market outcome contradicts public interest.

In a September 4 post on the Ministry for National Development (MND) blog, the minister said: "Unlike the central area, the suburbs are largely for families. While there is a need for smaller units...too many in the same locality cannot be optimal."

He also added that the new URA guidelines will be "moderate" and assured that the demand for shoebox units will not be neglected.

Citing previous times when the authorities received good response for intervening in the property market, Khaw says that he is confident that the new guidelines will be welcomed by both developers and property buyers.

ljessica@sph.com.sg