Size Doesn't Matter?

With the launch of the latest craze in town, the iPad Mini, who is to say small, is not desirable or that bigger is always better? The iPad Mini is believed to dominate the 7” tablet market and will be expected to replace up to 25% of the current 9.7” iPad users.

Can we say the same for houses? This is an important question that we Singaporean need to ask ourselves. Inevitably, due to land scarcity, the reduction in floor areas of newer housing has reduced. One good example is how a HDB 4A model has shrunk from 103sqm in year 2002 to as small as 85sqm (or smaller) today. Maybe, it is not so much of how much space we need, but how effectively or creatively we can manage our living area (See “How to live in a shoebox apartment?” Here, we are going to explore some interesting (weird?) concepts which might redefine our perspective towards size of a home, and accept the future of smaller housing.

Introducing the Shoebox Mini

In Warsaw, Poland, we see the world’s thinnest house by Architect Jakub Szczesny of the Polish firm Centrala. It is located in a 5 foot by 2 feet alley (converging to 50 inches at the end) between two buildings but it houses all the necessary furniture and fitting such as a “nearly double-size” bed, a toilet, a “bean bag sofa” and even dining and study tables! Total floor space is about 46 square feet (4.27 square meter). Also, this is a duplex, with desirable floor to ceiling height.

But is this truly liveable? Technically in accordance to Poland’s housing regulations, this is too small to be considered a residential dwelling. Well, I would say it is very much dependent on individual, and in this case, the maximum is TWO individuals. Maybe the initial general reaction is that you must be crazy enough to be able to live in such a house, but what if this is the norm for the future? Also, if this were to be located in the Orchard or CBD area, and is priced at about $3000psf, would you still turn this away? Even at the same dollar per square feet, the next design will definitely be a catch.

Coming Soon: The Shoebox Ultra Mini

Imaging a world, sometime in the far away future whereby the human population has exploded to 2000 billion (present population is estimated to be about 7 billion), where will we stay? Or should I ask:”How do live?” Van Bo Le-Metnzel of Hartz IV Möbel might just have the solution - The One Square Meter House (This should be the world’s smallest house).

Being mobile (wheels attached), this house concept is designed for you to be able to choose your location of stay, your window view and even your neighbours. Although it doesn’t come with the toilet facility or a king size bed, even at a whopping $5000psf, this will only set you back at $53,000. Where in Singapore can you get a house for such an attractive price? However, based on initial trial prices, per night rental for the “one sqm house” is about $1.63, which means investors beware.

So does size matters?

What will be next – the Shoebox Mega Mini measuring One-Square-Feet and it comes fully furnished? Although these are currently still concepts, we are not saying that they will not turn into practical reality. My advice is to keep an open mind and be ready to embrace weirder and more abstract designs for houses in the coming years ahead. Who says shoebox units are small?

Extracted from:

1. http://sg.news.yahoo.com/blogs/spaces/story-behind-within-world-thinnest-building-210352941.html
2. http://inhabitat.com/the-one-sqm-house-that-is-taking-over-the-world/

Investment Opportunities at the Transforming Farrer Park Enclave

One of Singapore’s most exciting areas gazetted for future development by the Urban Redevelopment Authority. Farrer Park combines the best of both worlds in one location, with the historic Little India district on one side and the vibrant Bras Basah-Bugis arts and entertainment precinct on the other. Quaint and charming arts houses, boutique hotels and new F&B establishments that are sprouting to life add much vitality and variety to the area.

Shop houses along Serangoon and Jalan Besar offer some of the city’s best local fare, while the 24-hour Mustafa Centre and eco-friendly City Square Mall draw crowds with their offer of a unique retail experience.

The transformation of Farrer Park has taken shape over the past few years with the successful completion of the Farrer Park MRT Station to Tekka Market’s remarkable facelift. At the same time, heritage landmarks are lovingly preserved, while modern infrastructure continues to boost the area’s accessibility and development potential.

In addition, Connexion at Farrer Park will be one of the world’s first integrated healthcare and hospitality complexes. Comprising a specialist medical centre with 189 consultation suites, a private tertiary hospital, a luxury hotel equipped with state-of-the-art conference and wellness facilities and a ground floor lifestyle retail zone, Connexion (built directly above Farrer Park MRT Station) will strengthen and support Singapore’s position as Asia’s leading medical hub when it is completed in 2013.

Opportunities for Property Investors

In tandem with the general increase in properties prices across Singapore, the private property prices in the Farrer Park precinct (District 8) has also risen over the past years with the completion of City Square Mall. Labeled as a “quiet achiever” by property experts and consultants, City-fringe homes tend to be overshadowed by those in prime and mass-market areas.

Notably, in recent years, the demand of show-box apartments (which refer to less than 500 square feet) within the Farrer Park precinct has gained popularity due to its proximity to Orchard, City Hall and CDB area.

TARGET: One-Bedroom Apartments at the Farrer Park Precinct

City-fringe one-bedroom apartments at the Farrer Park precinct are highly sought after partly for their accessibility, public transport links and lifestyle amenities. Investors also find it easy to get expat tenants as their accommodation budgets scale down.

From an investment perspective, the price level for a one-bedroom residential apartment at Farrer Park ranges from S$600,000 to S$900,000, thus offering good affordability for property investors.

More importantly, rental prices of Farrer Park one-bedroom residential properties have increased with the ongoing transformation of the heritage precinct.

  

As seen in the following graph, indicative rentals for condominiums nearby the Farrer Park MRT station range from S$3.84 psf to S$4.67 psf. For one-bedroom units, rental price per square foot are generally higher due to its compact size.

Using the latest freehold development project, Le Somme (located next to City Square Mall), in the area for reference, the approximate rental yield is as follows:

Price of a one-bedroom apartment: S$750,000

Size: 560 sq ft

Expected Rental per month: S$5.35 psf or approximately S$3,000 per month

Expected Rental Yield:  4.8% 

Driven by its proximity to city and amenities, one-bedroom apartments within Farrer Park area will likely to see potential upside and good rental yields with its affordability and growing popularity.

To find out more details on the latest freehold development project in this area, please visit: www.le-somme.com

The information contained herein does not constitute or form any part of any offer for sale or subscription of, or solicitation, recommendation or invitation for or in relation to any offer to buy properties nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.

All the information contained herein has not been independently verified. No representation or warranty, express or implied, is or will be made in or in relation to, and no responsibility or liability is or will be accepted by the writer or any of their affiliates, advisers or representatives as to the fairness, accuracy, completeness or correctness of, this information or any other written or oral information made available to any interested party or its advisers and any liability therefore is hereby expressly disclaimed. Any prospective property purchaser should make its own investigation and all information provided.

The information contains certain forward looking statements and forward-looking financial information. Such statements and financial information are based on certain assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from those expressed in these forward looking statements. Predictions, projections or forecasts of the economy or economic trends of the markets are not indicative of the future or likely performance of the properties listed herein. The inclusion of such statements and information should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by any other person, or that the forecast results will or are likely to be achieved. Actual future performance could differ materially from these forward-looking statements and information.

Bubbles Bubbles, but are they Trouble?

Many talks about the “property bubble” nowadays and that the inevitable will be coming soon to Singapore’s real estate market. But, if you were to consider this in context, what are the basis for such hype? Was it that the property prices are launching ahead despite the government numerous control measures? Or was it that the papers are always reporting the fantastic sales for new launches?

Why are the property prices ever increasing for almost three years straight on? When will the train loses it lustre? If you are in touch with the news, you would have notice that since the 1^st quarter of 2012, monthly property price index has been slowing down, and seems to be reaching a plateau. Objectively, this is a good sign for the buyers as this indicates a signal of the price stabilising. But if you were to take a step back, the more important question for buyers will be, “Is it a good time to buy?” I might not be entirely right, but dependent on the individual’s needs, wants and also the financial status, this could be a good time to consider getting that home that you have planned for (given the fact that most buyers had waited for almost a year for the price to drop – no thanks to financial reports at the start of 2012 forecasting the downturn of the market by at least 20%).

Why do I say that? Given the current global issues, we can safely say the world is pretty messed up – Europe is clearing up their backyard matters and America sweeping their dust under the mat. Of no surprise, Singapore can be considered as one of the more stable and “hassle-free” country right now (Actually, we could have been like this for a long time – do a Google check on this). And comparing the various financial tools (equity, FOREX, bonds etc) available, despite this recent bubble-bubble hype, property seems to be the most stable and might be the most profitable of the batch. Less the disadvantage of ill-liquidity, which other platform is able to help secure a growth rate better than your CPF interest rate of 2.5% annually? The key word here is “secure.” Furthermore, in the South East Asia region, the only two property market presently stables enough to consider your dollars and cents would have to be Singapore and Hong Kong. See the government interventions as positive and active interactions; logically, if the market does not have potential, such events would not have happened. The government understands that the property market forms part of the backbone the economy growth and its’ intervention is necessarily to SLOW DOWN (not stop or reduce) the growth, so as to pro-long the valuable returns to the country.

There have also been forecasts with regard to the expected declining volume of property transaction in Singapore till end of year – but does this mean that the prices will fall? To the common minded, this is usually the first thought when the topic is raised. However, if you were to take a closer, you might realise that FALLING VOLUME DOES NOT necessarily equate to the fall in prices. An instant would be the continued land sales by the government for residential development, and a good example would be the site next to Sky Habitat in Bishan. Sky Habitat is currently going for an average of $1700psf; what do you think the new site will cost? If nothing goes wrong, the site at Bishan would be sold at a price higher than that for Sky Habitat, and subsequently this would mean apartments going for higher than an average of $1700psf. If not, why would any developer buy the land if no basic profit is insight?

I am not saying that the market will never fall, but that the inevitable correction would be minimal. If you are an investor, I would recommend continuing to observe the market and be aware of the trends. Watch out for tell tale signs of the market picking up steam again when the current sentiment sets in. But never let history repeats – don’t over-wait till the next government measure. The most recent one proved to be one that affected investors more than others. And if you are buying for own stay, now may be a time to purchase your unit of choice, as this could be the new low in the coming years. Even with the correction insight, it’s effect would be expected to run out by the time you are selling the property without a penalty