The past few months have demonstrated that controlling a vigorous property market is akin to steering a canoe in rapids with a spoon. Despite cooling measure after cooling measure, the market always finds new ways to upset the careful direction laid out by the authorities.

This is even so in public housing, where there is, traditionally, a tighter control of the market. Public housing is normally subject to restrictions on who can buy, when they can buy and where they can buy. However, things tend to go awry when new ideas and variations are tried without much forethought and planning.

Take the Design, Build and Sell Scheme (DBSS) for example. It got to the point where developers were charging an arm and a leg for just a very nciely done up interior and fancy exterior. What’s even crazier, people actually bought into the hype. HDB just didn’t realise the extent that a private developer would go in order to maximise profit. Neither did they foresee how logic and reason would go out the window when buyers get dazzled by marketing and surface glitter. DBSS has now gone the way of the Dodo, with the Housing and Development Board (HDB) pulling the plug on it after much wailing and gnashing of teeth from “victims” of the high prices.

Just recently, another issue appeared, but this time it was Executive Condominiums (EC) that came into the spotlight. A penthouse unit in CityLife@Tampines sold for a reported SGD2.05 million. Now, this is no small sum, even in the current economic climate, but for public housing, it caused quite stir. The issues raised were many, not the least of which was the question of how it is within the purview of public housing to build luxurious penthouse suites costing upwards of $2 million, and spanning some 4,300-odd square feet (including a spacious sky terrace).

Predictably, the authorities responded with a new regulation that caps ECs to 1,600 square feet. Quickly and easily, the problem is fixed in a snap! Or is it?

Minister for National Development came out to say that “We provide EC developers with much flexibility, but they must be mindful that flexibility must be exercised in keeping with the intent and spirit of the EC policy.” on his blog, Housing Matters. Well, this new cap will certainly help enforce this thinking. But what about the other end of things?

We’ve already established that private developers will do everything in their power to enhance their bottom line. As a business enterprise, that is their prerogative. This does not always combine well with the objectives of public housing, however.

With the 6.9 million projected population by year 2030, there will be more pitfalls to be wary of. If these pitfalls aren’t taken care of, there will be even more such fiascoes in the future.

We have anticipated that housing units will shrink, as explained in our article linked above. Currently, the smallest EC is a two-bedroom apartment with a built-in area of 743 square feet. As developers try to maximise their revenue, we will see ECs start to trend towards “shoebox” apartment-like conditions. Just imagine two or three bedrooms crammed into a space of 500 to 700 square feet. If prices maintain their upward trend, the $1,200 per square foot (psf) paid for D’Leedon would seem cheap in comparison. The price quantum for such a three-bedder would appear to be low, but just as with “shoebox” units, it conceals a surprisingly high psf. cost due to the lower-than-expected built-in area. This combination could lead to consumers paying unprecedented “per square foot” (psf.) amounts for public housing property.

Shoebox unit floorplans

Small, but definitely bigger than a cardboard box

Yes, we already have limits placed on all non-central areas to prevent uncontrolled proliferation of “shoebox”-type units. Non-central residential property developments, whether private or public, must have an average unit size of 70 square metres (about 755 square feet); that is, large numbers of “shoebox” units must be balanced out by just as many larger units, or a few huge suites.

However, the lure of better profits will still tempt certain developers to bend, if not violate, the “spirit of the EC policy”. For example, they might use the elevated psf. prices of smaller two or three-bedroom units to give the impression that their larger units deserve higher-than-normal prices. This is already happening in the private housing market.

We certainly hope that the authorities are already aware of this issue, but if not, we’d like to suggest that those in charge of approving new projects start exercising better discernment and judgement when conducting their business. Not all decisions should rely solely on guidelines to be safe; good management involves making judgement calls in situations that may not be covered by a rulebook. The sudden proliferation of “shoebox” units should have been a wake-up call that must not be repeated in the public housing market. It should not be subject to such market experimentation, in keeping with the “spirit” of public housing.

Do you agree or disagree? Do you have concerns about this situation as well? Let us know with a comment below or at our Facebook, Twitter, and Google+ pages. Don’t forget to like or follow to keep updated on the latest BLUTA articles!


  One Response to “6.9 Million Raises Spectre of Shoebox ECs”


    We have the cooling measure just in place and now the 6.9 population. What controversy policies and what the Government is telling the citzens.

 Leave a Comment