Singapore’s housing solution is still amongst world’s best

Around the world, it is not a norm for people to buy their own homes – even though their countries are full of land. Many people the world over can only afford to rent. Buying property is either out of the question, or a big ticket item they can only afford much later in life.

Take the United Kingdom, for example. Although significantly larger in size than Singapore, it is not common for people to own property. That is why they have so many strict statutory laws on (short) leases. Landlords are often quite powerless, even in a non-payment situation you may not evict someone so easily. 

The Singapore situation is quite remarkable. Not only are our aspirations for EVERY CITIZEN to own a house quiet unnatural, our property market has moved in such a way that makes existing owners rich but yet enough new houses are available that are cheap enough for young Singaporeans to start.

There are many criticisms from the opposite side about our housing system, but these can be dismissed quite quickly:

  • Some say we are expensive

Firstly, is expensive a bad thing? If you own a property now, you want to wish it gets as expensive as possible. Our resale markets are open to PRs for this very reason. 

And is it really “expensive”? One of the government promises is for every citizen to own their own homes. Look around you, isn’t that the case? No one talks about renting, everyone talks about buying. Our policies are all geared towards this cause. There are so many government grants and assistance. The usage of CPF is another. The HDB also works very hard at rejuvenating old land, buying them back and re-creating new apartments for another generation.

I don’t want to argue about whether or not it is cheap or expensive, but rather I’d ask the naysayer to look around and see how many of his friends, colleagues and countrymen own their own property? 

  • The false 99 year lease conundrum

Whenever someone says 99 year is “short”, I’d like to point them to countries where 7 and 14 years leases are the norm. 99 years is very common and its reason is borne out of pure logic – how much land do we have to offer to someone to own forever? 99 year leases are normal and is equivalent to ownership, because whatever you do with the apartment (rent, or sell or sell-back to government), you already have profited and have lived for free.

I dare say that the opposition cannot and will never be able to come up with a better, different model. It is not possible. There really is very little room to manoeuvre. Our model is all about management and hard work: to balance the amount of surplus units against the existing units so that our market doesn’t overheat or crash. It’s easy to say, but hard to do. 

Do you know what happens when the market is too cheap? It means Singapore has a big problem – for whatever reason, people cannot hold their cash in this asset class and are selling off. 

And if the public housing become more and more expensive? That’s no good either, because younger Singaporeans cannot afford to buy. If this drags on, we then get a Hong Kong situation. We’re like Goldilocks – either too hot, or too cold and the country is in trouble. 

The other way is to attempt to turn our ownership-model into a rental-model, but that would be absurd. We fought so hard just so that citizens can afford to buy a home and prosper from it – why are we going the other way around when everyone else in the world is trying to become more like us?

In short, consider these points:

  • Our citizens see their wealth escalating from property upgrades.
  • At the very least there are ways to monetise your asset for old age
  • Significant government rebates and funding have started off many a Singaporean on their property journey
  • All this, and we must remember, that we live in a land scarce city. Many a times, we behave like we don’t

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