Monday, May 16, 2011

Developers nudged to rightsize shoebox homes

(SINGAPORE) The Urban Redevelopment Authority seems to be encouraging developers of shoebox units to increase the size of their apartments. The minimum apartment size that URA is likely to approve these days, especially in projects with many micro apartments, seems to be 35 square metres, up from 28 sq m a couple of years ago, developers told BT recently.


Analysts say that promoting an increase in the size of shoebox units may help to cool the property market since these micro apartments have been blamed for fuelling increases in per square foot prices at some property launches.


A URA spokeswoman stressed that the planning authority does not stipulate a minimum size for apartments to give developers flexibility to build apartments of varying sizes to cater to home buyers' needs. Rather, it adopts a consultative approach, working closely with developers and architects in a negotiated process to enhance the quality of new developments in Singapore.


'When we receive development proposals comprising many small residential units, our immediate concern would be the quality and liveability of the space for home owners as well as the potential impact on the living environment of the neighbourhood and the local traffic situation. In such cases, URA's planners will work with the developers and architects to finetune the design of the development, unit size and unit layout.


'Thus far, the revised (minimum) unit sizes are typically in the range of 35-50 sq m gross floor area, excluding features such as bay windows, balconies and air-con ledges.'


Where necessary, the applicant and URA may jointly do studies to determine the impact of the development proposal on traffic in the location, she added.


The concern is whether the location can handle the additional traffic load arising from an increase in car population if a project with many small apartments is built. This is because the more units a developer packs into a residential development, the higher would be the number of car park lots it has to provide in the project.


BT understands that since around Q3 last year, developers planning to build projects with a substantial number of smallish apartments have been given 'verbal advice' by URA that apartments should be no smaller than 35 sq m in gross floor area excluding balconies and air-con ledges.


This 'verbal advice' seems to have been issued to developers and their architects when they made enquiries after their applications had been turned down, according to some market players.


Industry participants suggest that URA has thus effectively increased the minimum apartment size it would allow, which was previously understood to be 28 sq m (or around 300 square feet), as reported by BT in October 2009.


It was reported then that URA had turned down some applications involving apartments below 28 sq m. In that year, the market had seen what was believed to be Singapore's smallest ever apartment - at 258 sq ft - at the Suites@Guillemard.


In URA's response to BT last week, its spokeswoman said that in processing development proposals, it assesses, among other things, the overall building design, site configuration, unit layout as well as the localised traffic situation to ensure that a proposed development involving small units can provide a good living environment for home buyers. 'In general, residential units should be self-contained with basic amenities such as a living area, bedroom, kitchen and bathroom.'


A developer estimates that an apartment with gross floor area of 35 sq m (excluding balcony and air-con ledge) may have saleable area of about 40.5 sq m (about 436 sq ft) including the balcony and air-con ledge. He reckons that URA is more likely to be stringent about ensuring that apartment sizes are not too small for projects with a large proportion of one bedders and one-bedroom-plus study units.


'But if the one bedders make up a relatively small proportion of units in a large development, which also has bigger units like two, three and four-bedroom apartments, URA's planners may allow a few units even if they're under 35 sq m. A lot will also depend on the layout of these units,' said the developer.


UOL Group president (property) Liam Wee Sin, said: 'Ultimately, what is important is that buyers are made fully aware of the size of apartments they're purchasing and the new requirement for showflats to accurately reflect the actual size and layout of the units will help in this aspect.'


Another developer who declined to be named said that URA's approach to encourage bigger units may have an impact on developers who specialise in shoebox apartments. 'Very often they have been able to achieve relatively high psf prices on these small apartments since they've been able to keep the lumpsum price affordable, at below $500,000. They can price say a 320 sq ft unit at around $1,400 psf and it would cost $448,000. If they now charge the same psf price rate for say a 435 sq ft, the absolute price would be $609,000.'


DTZ executive director Ong Choon Fah suggests that the completion of some of these shoebox developments over the past year or so may have called into question the practicality of living in these small spaces and highlighted the impact of this housing type on the lives of residents and social fabric in the neighbourhood.

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