Property developers in Singapore are marketing smaller flats these days as they are more "affordable". Apparently, Mah Bow Tan isn't the only one taking liberties with the word "affordable" these days.
[My very concise opinion on these flats is that they are not affordable at all and in fact, represent very poor value.]
I studied in Baltimore in the United States as an undergraduate. Back then, there was a limited supply of on-campus housing, so in my last two years as a student, I moved out of university housing and into a studio apartment. I lived alone for those 2 years, which really did a lot for improving my self-reliance and confidence.
[Having experienced living in such a rough town (Baltimore has an incredibly high crime and homicide rate, and there were at least 2 rape/homicide cases of undergraduates during my time there), I figure I probably have the wherewithal to live anywhere now ... but that's a story for another post.]
I'll spare readers the horror stories of looking for an apartment. Suffice it to say that the studio I lived in was quite small, about 400 square feet, so I think I am qualified to comment on what it's like living in a small apartment. I had friends who lived alone in even smaller apartments, about 250 square feet, which is approximately the size of the shoebox flats mentioned in the above news article.
I think I have to agree with property developers who steadfastly refuse to build apartments below 400 square feet in size. That is about the minimum for comfortable living. I viewed the 250 square feet apartments when I was apartment-hunting, but I quickly rejected them...and I'm not what you would call a fussy person.
Simply put, 250 square feet is not enough for one person. Living in such a small apartment will seriously 'cramp your style', so to speak.
You will not be able to:
1. Entertain, since there is no room for more than about 4 people to sit comfortably, assuming (and that's a big assumption) you have that many chairs and a coffee table in the first place. A sofa is out of the question of course. A (Western) futon is a compromise that lots of studio dwellers make.
2. Accumulate stuff. Every time you go out shopping, at the back of your mind, you will ask yourself not how much the item costs, but how much space it will take up in your apartment. At one point, all my worldly possessions in the US of A could fit comfortably into two suitcases and 4 boxes.
3. Cook, since the fumes of cooking (even with a hood) will permeate your apartment and saturate all the fabrics. Boiling and steaming are ok. Frying and saute'ing are not. Of course, this is assuming you even have the requisite paraphernalia for cooking. Remember, you will have no countertop space to prepare food, few cupboards and no room for appliances (except for a stove, maybe a rice cooker and the all-important microwave oven for reheating). It's right about this point that most people give up having any semblance of even having proper utensils and crockery. Then they decide to eat out or order in for all their meals.
4. Have all the comforts that most of us take forgranted. You can choose some, but not all of the following: a desktop computer, large refrigerator, dishwasher, television, stereo system, large desk, dining table, queen-size or larger bed, and other bulky items of furniture. A washer and a dryer are obviously no-go; you'll have to do all your laundry outside or in the basement of the apartment building (which is an alien notion for most Singaporeans). And needless to say, what large items of furniture a studio dweller selects is a reflection of his or her priorities. For many bachelors, having a queen-size bed is a necessity (no prizes for guessing why).
5. Stay at home much, if at all. This was a dealbreaker for me when I viewed the small 250 square feet apartments, as I am pretty much a homebody. I could not imagine coming home every day from school or work, opening the door and immediately facing a tiny closet-like living space, where a bed would immediately come into view and dwarf everything else around it (Believe me, you will choose miniature, collapsible or stackable versions of just about everything when you live in a studio. Tables, chairs, nightstands etc.). It is incredibly depressing, I can assure you.
So who would live in a shoebox apartment? People who fall into two categories: those who can't afford any better, and those happy (expat) singles who spend all their time out and about and return home only to sleep. The former we can discount, since they are clearly not the target demographic that Singapore private property developers are looking at. The latter are not likely to buy property in the first place, seeing as how they are so footloose.
That leaves investment buyers. For those buyers of Mickey Mouse flats who are thinking of buying these apartments and then renting them out to the aforementioned singles, good luck with that.
First of all, even swinging singles look at how much it costs to rent a place. Small and cheap will always find takers, the same cannot be said for small and expensive. Given the prices of these flats, a commensurate rent to yield a reasonable ROI would probably be in the ballpark of about $1k - $1.5k a month, not including utilities and condo expenses. Unless the location is very prime and the building amenities are excellent, no single is likely to pay that much. And by prime location, I mean proximity to town (Orchard Road), public transport (given how "unaffordable" a car is), laundry facilities, restaurants and eateries, malls etc.
The larger problem is that the kind of tenant that this kind of tiny apartment is meant to be rented out to, is supposed to live a lifestyle that our city is not geared towards supporting. Ergo, such a tenant is probably uncommon.
Cities that have high rental rates for small apartments include London (Zone 1), New York City (Manhattan), Tokyo and Hong Kong. All these cities have urban densities in their city cores that are in actuality, more concentrated than Singapore's, despite Singapore having a higher average population density. There are more shops, services, restaurants, nightclubs and crucially, subway stations, per square foot in the inner city core of these global cities than Singapore. And more of them operate at extended hours, or in some cases 24/7 (like the New York City subway, at least in Manhattan). In these cities, tiny apartments in the city core can and do get rented out at exhorbitant rates, simply because there is so much to do outside in the city. In addition, wages are considerably higher in these cities to pay for the astronomical cost of living.
In contrast, except for nightclubs, Singapore pretty much shuts down after 11pm. The lack of public transportation options after midnight is a major culprit for this. Singapore can bill itself as a family-friendly destination for expat families, but it cannot claim to be equally attractive to "zero-drag" singles. Especially since expats now tend to be employed on local packages instead of the cushy expat packages of yesteryear.
The inescapable conclusion is that these tiny-ass apartments will likely be rented out to less desirable, short-term tenants. Property analysts and experts interviewed by the article mentioned the likelihood of monthly, weekly or even hourly rentals (I have no idea what is the legality of such arrangements). This sure recalls another property case, though it may not stop determined landlords.
Possible tenants would be tourists (I once stayed in a New York City sublet in SoHo for a week; the original tenant was working abroad; speaks to how hard it is to land a good apartment in Manhattan) and short-term visitors such as business travellers. Less savory possibilities would be brothel clients, illegal immigrants, and the like.
Is the Mickey Mouse flat a sustainable trend? Hard to say, looking at how property prices have stayed gravity-defying through a recession. One thing's for sure, I know what it is like to live in small apartment, and I would never go below 400 square feet. For those who find out the hard way, well, lots of luck with owning a shoebox apartment. If there's one sign of a property bubble, this could well be it.