(2) URA New Guideline Effect:
Besides that, in October 2019, URA announced the new guideline to cap the shoebox units.
Under the new rule, the number of shoe box units will be reduced.
Previously, the maximum number of units was derived by dividing the Gross Floor Area (GFA) by 70 sqm. Now the new maximum number of units is dividing the GFA by 85 sq m.
Meaning the maximum number of units of the future project will be reduced.
With the same GFA, if last time the developer can build upto 1,000 units, now with the new guideline, they can only build upto 823 units only.
And now here comes the focus of the new guideline.
The average unit size of a project is determined by dividing the GFA by the maximum number of units.
With the same GFA, when the number of units reduced, the average unit size will increase.
As a result, the developers have to increase the average unit size from 70sqm (753sqft) to 85sqm (915sqft) for the future projects.
This new URA guideline is the alarm for you especially if you are looking for 1 or 2-bedroom unit.
The developers will have to build 20% bigger than the current 1 and 2 bedroom units.
In consequences, with the same $PSF, you will have to pay 20% higher price in the future.