Living space: The affordability of public residential housing in Singapore is a growing concern for all. The soaring home prices partly stem from a broader supply shortage after construction ground to a halt during the pandemic, say analysts. — Bloomberg
SINGAPORE: Expats aren’t the only ones feeling the pinch of rents in Singapore rising at the fastest pace in the world.
The pain is trickling down to young singles like Sonam, who are largely shut out of the nation’s subsidised housing programme and are starting to question the government’s resolve to tackle the problem.
The 33-year-old tech worker, a lifelong supporter of the ruling People’s Action Party (PAP), moved to Thailand after her landlord raised her rent by 70% for a two-year lease. She plans to support the opposition in the next election.
“We’re all moving out in our early ‘20s, and now there’s this: ‘Oh, just go back home’ to your parents,” Sonam said from Bangkok, declining to give her last name for fear of losing her job.
“The fact that they’re so unaware of what is really happening to millennials and what we need to be able to survive in Singapore – it’s just bizarre to me.”
For the PAP, solving the housing problem is crucial as the party navigates succession as Prime Minister Lee Hsien Loong, son of the nation’s founding father, prepares to hand power to the next generation of party leaders.
The party had its worst showing in the 2020 vote despite winning 89% of parliamentary seats, prompting Lee to say that policies must reflect the younger generation’s “significantly different life aspirations and priorities”.
Top leaders are growing concerned. Last month, the government announced a bold move to double the stamp duty to 60% for foreigners buying homes, the highest levy among major global cities, while taking other steps such as releasing more land for construction.
“To have steep increases for foreigners certainly points towards the ruling party starting to build its narrative” for the vote, said Nydia Ngiow, a managing director at BowerGroupAsia, a policy advisory firm.
“This adds to the speculation that the elections could be held earlier than 2025.”
In a national address last week, Finance Minister Lawrence Wong, who is positioned to succeed Lee, acknowledged that prices have soared but said incomes have kept pace.
“In Singapore, the prime minister has to be a real estate agent,” he said. “So I’m learning and brushing up on my skills.”
While the Housing and Development Board (HDB) programme has won plaudits around the globe, its eligibility rules generally favour married couples over young singles like Sonam.
The National Development Ministry said there was a surge in applications for subsidised housing and that it’s taken steps to update policies “to better meet” the aspirations and needs of its population.
“We are making good progress towards getting the HDB building programme back on track,” the ministry said in response to questions from Bloomberg, adding that it’s overseeing almost 100 projects island-wide to meet the growing demand.
Singapore has largely defied a global property slowdown as an influx of wealth from China and other countries fans the market. Home prices have jumped for 12 straight quarters, even as they declined in cities from Hong Kong to London.
With so many people priced out of the market, demand for rentals has soared. Rents for private apartments and public housing surged about 32% and 27%, respectively, in March from a year earlier, though landlords often demand more.
Singapore has topped New York with the world’s fastest pace of rental growth for high-end properties.
While the rental hikes have impacted expatriates more acutely since they are less likely to own homes, a survey last year showed that two in three Singaporeans between the ages of 22 and 29 are choosing to rent due to insufficient savings.
Belle, a Singaporean content creator renting a shared flat, would like to see a cap on rent increases. She, too, is considering voting for an opposition party after previously supporting the PAP.
“We all know that Singapore is a very comfortable, reliable country to live in,” said Belle, 28, who didn’t want her last name used.
“But it is just a little sad that it doesn’t seem like the government’s really changing its course and there are no safeguards to managing the rental increases.”
Singapore’s subsidised housing programme provides some refuge from soaring prices. The median price of an HDB resale unit is just S$539,000 (US$406,000 or RM1.8mil), compared with S$1.48mil (RM5mil) for a private condo, according to Cushman and Wakefield Plc.
Though popular, the flats have strict eligibility criteria. Singaporean families and married couples generally qualify for a new HDB apartment at age 21, while singles generally aren’t eligible until they hit 35. That rules out buyers like Sonam, though young singles can tap into the resale market.
Gay couples do not get the same benefits as those in recognised marriages.
The angst over housing may soon play out in politics.
Singapore will elect a new president by September in a vote for a largely ceremonial role that will test the nation’s mood ahead of a general election that must be held by November 2025.
While there’s little indication the PAP would lose power in an election, the party is sensitive to popular sentiments on bread-and-butter issues. Even a marginally poorer showing would be seen as a sign of weakness for a government that relies on unassailable support at the polls.
Though Singapore recently passed a budget full of handouts, a majority of residents think it hasn’t handled inflation well, according to a poll by Blackbox Research.
Its approach to housing costs is at the top of the list of grievances.
Meanwhile, a YouGov poll in December found that two-thirds of respondents said the government should place greater focus on housing affordability.
“The PAP still has a lot to do in terms of assuring Singaporeans that Singapore remains a very good place to live, work and raise a family and that the Singapore dream is still very much alive,” said Eugene Tan, a political analyst and law professor at Singapore Management University.
The soaring home prices partly stem from a broader supply shortage after construction ground to a halt during the pandemic. While the government has since pledged to speed up new developments, other attempts to solve the problem have been met with mixed reactions.
Opposition lawmakers were critical of a housing grant increase this year, saying it would set Singapore off on a continuous price spiral.
Others complained that the policy disproportionately benefits couples. In the meantime, a new pilot programme offering hostel-like public housing for low-income singles was likened on social media to prisons. — Bloomberg
