Unwanted shoebox flats surface in property auctions

For the first time in four years.

Nine shoebox flats have surfaced in property auctions this year, a notable trend considering the fact that not a single shoebox flat has been put up for mortgagee sale in the past four years.

According to Colliers, the emergence of shoebox flats in mortgagee listings reflects the widespread effects of the cooling measures and tightened credit rules.

Located at various locations such as Geylang, Haig Road, Woodlands and Wilkie (Dhoby Ghaut), these shoebox units are generally priced below S$1 million.

“Besides singles and couples with no kids, investors are also drawn to shoebox apartments due to their relatively-affordable price quantum. However, investors who are servicing more than one loan may have felt the heat from the increasingly-competitive leasing market. As such, those who are unable to secure tenants or have been hard-pressed to accept lower rents may find it a stretch to service their mortgage. This may then result in default in their monthly mortgage payments,” said Annie Chan, Director of Auction & Sales at Colliers International.