Our Prime Minister said home ownership is Singapore’s key national policy.
A high home ownership rate of 90 percent has improved the lives of Singaporeans significantly. It allows us to enjoy the fruit of the country’s economic growth. It also gives us a stake in the country and something to fight for.
Did our leader have to emphasize this if all Singaporeans can see it?
What exactly are we unhappy about?
Housing in Singapore has improved by leaps and bounds from humble squatter houses and over-crowded slums in the 1950s to world-class public housing today.
HDB homes gives us the sense of security and comfortable environment to bring up our family. It also helps us to build the sense of belonging in our neighborhood and our nation.
Our HDB flats are highly subsidized by the government. We have CPF accounts to pay for our mortgages. We have town councils to manage and maintain our housing estates. We have SERS and VERS schemes to help us upgrade old flats.
Why are Singaporeans still complaining about the HDB flats?
Why National Development Minister Lawrence Wong’s “not all old HDB flats are eligible for Sers” speech alarmed old HDB flat owners?
Why Mr Wong’s recent reminder that “a 99-year leasehold flat is an owned asset, not a rental” upset many Singaporeans?
Because what Mr Wong said has completely shattered the housing dream of Singaporeans.
We have put all our hope in our HDB flat. It is our home to live for as long as we need. It is our priciest possession that can appreciate in value over time.
It is the drive that makes us work hard every day. It is the debt that makes us willing to pay the bank first every month. It is the bond what makes us rooted in this Little Red Dot and won’t go anywhere.
Home ownership is our state religion and national doctrine. Singaporeans worship properties and believe that it is the only way to preserve our wealth.
We are baptised after birth for the redemption of our HDB flat one day. We devote our lifetime in the pursuit of owning our home and upgrading to a better home with our hard-earned money.
And now you told us that what we put our faith in is just “an owned asset” whose value can depreciate like any other asset?
Financial crises in the last two decades tell us that property prices can dive during bad times. Aging population and old flats make us question whether there is sufficient demand to support the value of aging flats. High cost of housing in a mature economy makes us wonder whether we have parked too much retirement fund in housing.
The high support for home ownership has given rise to expectations, with the Government now unfortunately bearing responsibility for any perceived negatives in our current housing, including housing prices, and receiving little praise for any positives.
– Tan Jin Meng, a postgraduate from the Lee Kuan Yew School of Public Policy
Even the hottest property market can cool down
In the newly-released UBS Global Real Estate Bubble Index 2018, Hong Kong tops the list with the highest risk of housing bubble. Average salarymen need to work 22 years to afford the down payment of a 60 square metre (645 sq ft) flat in Hong Kong.
How high are property prices considered high?
Prices of Hong Kong residential properties have jumped 165 percent in ten years’ time. New projects are made more affordable to buyers with 200 to 300 sq ft “micro units” which are sold at “mega prices” at S$1 million to S$1.38 million.
Over the last three weeks, the continual slide of stock prices, coupled with rising interest rates and an escalating trade war, have triggered a slump in Hong Kong’s housing market.
For fear of a further plunge of the property market, sellers are slashing prices. Recent deals in large private projects were transacted at 10 to 20 percent lower compared with the peak just a month ago. Prices have retreated back to the level of mid-2017.
Buyers are expecting more price corrections and holding on their purchases. Both the new and secondary markets report record low sales volume. Analysts now predict home prices to drop by 40 percent in two years’ time.
The world’s priciest property market has finally cooled off.
Imagine those who just bought their new home with 22 years’ savings for the down payment and a new 30-year mortgage?
Nobody will buy properties if they know prices will be coming down soon. But the buyer who paid S$1.38 million for a 209 sq ft unit in Pok Fu Lam must be an exceptionally devoted disciple of the property religion to make that buying decision.
In recent years, more millennials in Hong Kong who do not have rich parents simply renounce the religion of property. They give up on buying their homes, use their savings to travel around the world or migrate to places like Taiwan for greener pastures.
Home ownership is just a lifestyle
Home ownership is an Asian culture. It is a tradition to associate getting married with buying a new home to start a new family.
On the other hand, Europeans prefer to rent rather than buy. Because renting implies freedom and flexibility in lifestyle, career, mobility and finance.
In my 2015 blog post “Should I buy or rent?”, I mentioned that it is a never-ending debate whether we should buy or rent. Afterall, this is very much an individual choice. The buy-rent breakeven point also depends on where we choose to stay and how long we are planning to stay there.
Japanese philosopher and psychologist Ichiro Kishimi (????), the co-author of best-seller “The Courage To Be Disliked” which sold over a million copies, shares an interesting view on marriages in his new book “The Courage To Become Happy”.
“Marriage is not about choosing a life partner. It is about choosing your lifestyle.”
“Once we believe in marriage, we can love anybody. Who we are going to marry becomes unimportant. “
“Because we trust that this is our fate. Love is a faith and trusting behaviour. The courage to love is the courage to have happiness.”
Home ownership is not about buying a property. It is about choosing your lifestyle.
Once you believe in owning your home, you can buy anything. What, when and how much you buy become unimportant.
When you decide to buy a property to stay, it is not the commitment to buy a HDB, EC or condo unit. It is the commitment to the way you want to live your life.
Because you believe that you must own the roof over your head, you have the courage to buy anything, at any time and at any price.
Ichiro Kishimi said, “For people who tell others that they are still waiting for ‘the one’. This is just their excuse to stay single by eliminating the potential of anyone to be their life partner.”
For people who are renting and tell others that they are yet to find their ideal home. They are not going to find it. Because they simply enjoy the lifestyle of renting and being a tenant for the rest of their life.
Is there really true love or soulmate in this world? Well, it depends.
It is similar to seeing ghosts. Some people insisted that they have seen spirits and described their horrifying experiences in details. Some people checked into the world’s most haunted hotels and complained that nothing happened.
If you believe, there are ghosts. If you don’t believe, there are no ghosts.
How can the spirits show themselves to you if you don’t believe in them?
Similarly, how can I convince you the benefits of renting if you believe in owning your home? Conversely, how can I show you the satisfaction of staying in your own home if you don’t believe in buying?
Keeping the faith in your religion
Allow me to repeat what I said in my youtube podcast #12 “Six Reflections From Recent HDB Talk”,
“Buy HDB or not is completely your choice. You are entitled to buy it. But you are not compelled to buy it. Buying an HDB flat is not like doing National Service or contributing to CPF. It is not compulsory. You can choose to buy or not to buy.”
Because we, the citizens of Singapore, have pledged ourselves as one united people, regardless of our religion in home ownership or home renting, so as to achieve happiness, prosperity and progress for our nation.
“Once you decide to join the gang of HDB owners, like the 80 percent majority in this country, you must play by the rules of the game. We all know that every game has its dos and don’ts, pros and cons, fun and not-so-fun parts.”
One day something unexpected happens and challenges your belief. You start to question your faith. The conflict in your heart disturbs your peace of mind. You no longer know which path to take.
But remember that home ownership is a religion. It is you who choose to believe in it. It is you who pick the lifestyle. If you have converted, don’t question it.
“If you think it is more worthwhile to rent rather than to buy, don’t buy.
If you see there is a better, fairer and more affordable alternative than HDB, go ahead with the better choice.
If you find putting your money in your business, other asset classes, or homes outside Singapore makes more sense, do what suits you best.”
If you don’t have strong reasons to get out of the cult; you don’t have a much better option; you don’t perceive to be better off on the other side; if you can’t bear the costs of leaving it, then keep the faith, follow your destiny and accept your fate.
Always keep in mind that home ownership is not just Singapore’s national policy. It is our state religion and a sacred belief that we uphold in this small island. How many of us can afford not following it?
Just to side tracked a bit.. not just housing, cars, handphones n other material wealth are just sporeans most obsessed of..
Singapore is very much a materialistic country (like most developing and newly-developed countries). We gauge success by the “things” we own. We often forget that there are other aspects in life that we can be equally successful if not better: culture, arts, music, relationship, community and religion (the real thing).
Well said. Buying a real property is both consumption and investment decision.
The consumption part is religion. Or your mum-in-law tells you to buy a flat then her daughter would marry you.
But the investment part is calculation. Most ppl’s problem is they confuse the two. This problem is fueled by agents. When it is a poor investment, they say it is about life style.
That’s a good one! With poor investment decision, we end up buying the wrong thing and live the “lifestyle” of working for the developer, the property agent and the bank.
It depends on whether the process involves the brain and thinking. If we look at blind faith and belief, then losing money mindlessly as it becomes a religion can be the end result.
Can’t agree with you more. Many people lack independent thinking and they can’t tell which are the right people to trust. What they do is only to follow the herd or the conventional wisdom when it comes to important matters like home ownership and property investment.
Majority of Singaporeans are very kiasu. They expect whatever money that come out of their pocket, a good return of monetary value must be included. No matter what help or solutions provided to them, they are not happy. I thought the government should not have provided government flats for most Singaporeans. It should be like Hong Kong where everyone who wanted to have a home must buy from the private property. If this is the case, today 70% of the citizens totally cannot afford to buy a home. And those who can afford a private property, it will be so damn expensive. Everyone should know by basic calculation the prices of government flats are reasonable price. Hence when the flat reaches the 99-years leasehold, how can they expect it must still have a good value? They thought the 30 years loan mortgages have removed their CPF retirement funds so not enough money to retire comfortably. But does these kiasu people ever realized their opportunities of been able to have a home by paying a reasonable price on it? These means paying a much lower prices for apple and still expect the apples to be sweet, juicy or perfect? Don’t everyone knows good things not cheap or cheap things not good? In the first place, they should be renting houses rather than buy a government flat. If they wanted a house with added value than by all means buy or invest a private property. HDB flats are for people to have a roof over their head and strictly not for an investment. And not forgetting in some countries, government flats are only for low pay citizens with a waiting period of 5-10 years before you collect the house key.
Recently I went to view a private property. The seller was selling above current valuation, an extra S$250,000. I asked the seller if the prices could be closer to valuation prices. He said he bought it at the high price. This seller has the typical kiasu behavior. If he bought at a high price, it means he doesn’t have a good sense of an investor. He expect buyer should cover his lost! So can I ask him to rebate me the recent extra stamp duty implemented recently? Buying a property is exactly like a business investment. We all know not all business reap profits. There are also plenty of people losing money in their business. This is a game of win some, lose some.
The reason for me to relate this story because I just wanted readers to understand how kiasu are these people when they expect good values for the home they buy to stay. Who can expect the woman they married will guarantee to bear children? Everything has good or no good.
Instead of complaining, they should start planning for themselves a comfortable retirement. Do you expect a sword are sharp on both side?
Sad…..
Singapore is very much a nanny state. The citizens expect the government to take good care of every aspect of their life. Whenever there is a need or a problem, instead of trying to find a solution on their own first, the arrow will automatically point to the government. People simply sit there, wait for the answer from the relevant authority, then evaluate and criticize what the government has done.
The result of a nanny state is overprotective parents and dependent kids. One side is constantly giving unsolicited ad unnecessary help while the other side is ungrateful and take things for granted. The latter gradually lose their critical thinking and the ability to stand on their own two feet.
Our pioneer generation is more thankful for what PAP has done. Because they have seen what was Singapore like in the past – from nothing to what we have today.
https://www.propertysoul.com/2017/11/28/release-of-psle-results/
Hi PropertySoul
I just touched down in Singapore back from my trip HKG for a short leisure trip.
While I was there, I was just checking out the posters available on the numerous “realty companies” and was pretty shocked after doing the conversion into S$-equivalent.
Maybe for those Singaporeans who feel that home ownership is out of reach, they would feel relieved that they’re not based in HKG instead. By my very rough (and amateur) estimation, is almost impossible for most young working adults to acquire any “decent” properties over there compared to Singapore as the prices are considered stratospheric in my own personal opinion.
I’m not insinuating that Singapore property prices are cheap on a global standard, but rather I am saying that at least we’re not the most expensive.
Then again, such objective assessment may not be easily accepted by everybody. It is an uniquely Singaporean trait to complain about anything which they are unhappy with.
That said, I think it also depends on which side of the fence you are on. As a buyer, one may be complaining that the property which they are eyeing for is perceived to be so overpriced.. but when it’s their turn to sell, they would be complaining why didn’t the property price skyrocket?
#RandomThoughts
Thanks for your remarks. I came from Hong Kong and the property market there is just far more “exciting” – prices move faster and higher because of supply-demand. There are already three cycles when Singapore only finishes one. That said, asset bubbles are like bouncing balls. The higher they jump, the lower they fall. Just this week, Hong Kong news reports that owners of the few most representative private projects are cutting their asking prices by HK$1 million (S$176,000) each round in every counter-offer. That is definitely not for the faint-hearted.
Well, that is willing buyer willing seller. Many foreigners staying in Hong Kong rent instead of buy. Similarly, many foreigners in Singapore will never buy a car despite being here for a long time.
Hi Vina
Interesting subject. HDB is definitely part and parcel of Singapore landscape. Sure, like religion you have a choice. Take or leave it. Buy or rent as you say.
On the flip side of the coin, it is heavily subsidised. Subsidy has even gone up 40% this year as reported. It seems that it has become every Singaporean’s entitlement to be part of the wealth enhancement program. Those who do not capitalise it by way of applying BTO/ SBF loses out as as the subsidy comes from our tax money. Once I did the back-of-envelope calculation, the resale and BTO price difference of a 4-room flat is almost 100%. This calculation was done in 2008 in Punggol when I was about to sign up for a BTO there. After 5 years, one can almost double your money in the resale market. Many young couples went this route to own a condominium.
Because the Govt allows only Singaporeans as a minimum eligibility requirement for applying BTO/SBF, Singaporeans would waste this chance to wealth enhancement if they do not opt for it. Many Singaporean millionaires are made in this process. So it is more than a lifestyle choice.
Different countries give different privileges to their citizens in housing. In Singapore, it is HDB flats. Of course we can’t beat U.A.E. for their enviable citizenship benefits that cover land and housing, education and training, high salaries, special loans, etc.
Singapore is a newly-developed country. The rapid growth of our economy causes spiralling property prices, including both public and private flats. But the start of this century saw high construction cost and stagnant population growth. This translates to higher first-hand BTO flat prices and weak HDB resale market. HDB owners now realize that their flats is their home only, whether it can create wealth in the future is questionable. If they want to upgrade, tens of thousands in COV is a perk of the past. They have to pay for the big price gap between HDB and condo.