'Mickey mouse flats' still selling well

Record number of flats of 500 sq ft or less sold last year; demand still strong so far this year

SALES of small apartments - the so-called mickey mouse flats - skyrocketed last year and are still going strong this year.

There were 696 flats of 500 sq ft or less in size sold last year, based on caveats lodged with the Urban Redevelopment Authority's Realis system.

That is the highest level since such records began in 1995.

And sales of units between 500 and 800 sq ft hit 1,285 last year, according to a report from property firm CB Richard Ellis (CBRE).

Buyer interest is still strong with 533 units of 800 sq ft or less sold in the first four months of this year. The total number of flats of 800 sq ft or less in the primary residential market comprises about 23 per cent of the 2,300 caveats lodged since yesterday, CBRE said.

CBRE residential executive director Joseph Tan said: 'What started as a notable trend in 2009 appears to have caught on in the early part of 2010.

'Small-format units form a significant proportion of the overall burgeoning sales volume that we have seen in the first four months of this year.

'Developers continue to provide these small- format units and home buyers seem to be biting.'

These units are commonly included as one-bedroom flats in project launches. The Altez, for example, has a substantial number of units ranging from 527 to 816 sq ft while the 134 one-bedroom units at 76 Shenton range from 592 to 624 sq ft.

Buyers like the relatively smaller price quantum for such units, making them more affordable compared to family-size flats.

Developers can also maximise their returns by selling these units at a higher price per sq ft (psf), CBRE said.

Mr Tan added: 'When these units are eventually completed, the most likely occupier profile would consist of expatriate tenants or Singaporean single professionals.'

As lifestyle choices in Singapore continue to evolve in a cosmopolitan environment and the demand for these smaller units remains strong, developers will continue to provide small-format units in the residential market, he said.

DMG & Partners Securities property analyst Brandon Lee said small units were the main draw during his visit to small to medium-sized projects last weekend.

Small units, which comprise 70 per cent of Oxley Ventures' Parc Somme near Farrer Park, had a swift take-up, he said.

One-bedders of between 300 sq ft and 450 sq ft fetched $1,350 psf while two-bedders from 550 to 670 sq ft were selling for $920 psf.

Mr Steven Tan, executive director of OrangeTee's residential division, said the trend for shoe-box- size units took off only a couple of years ago.

'The most important thing is to notice the layout of the unit. It's better to have just two bedrooms in an 800 sq ft apartment than squeezing three bedrooms in and making the place unattractive due to its tight space,' he added.

Although expatriates have been returning to Singapore, Mr Tan cautioned that if the economic recovery falters, owners of small units might struggle to find tenants.

Source: Straits Times, 8 May 2010