In his National Day Rally speech, the Prime Minister says he fully understands the concerns of single or unmarried Singaporeans over housing. He says the Ministry for National Development (MND) is looking into addressing these concerns. Currently, singles can only buy resale HDB flats. In the event that there is a policy change, singles may be allowed to purchase new HDB flats.
In a blog post on 8 September (“Singles, I hear you“), Minister for National Development, Khaw Boon Wan, acknowledged the concerns of singles. However, he says he “cannot hurry too much” and that he needs to focus on the immediate needs of the second-timers. The minister explained that he wants “to have a better handle over the likely additional demand on new HDB flats when we open the scheme to singles.”
He suggested that there are several ways to address the issue. One, adopt an incremental approach to implementation, with “some initial restrictions” on singles; and two, to launch a larger number of BTO flats next year.
What might the impact be if singles are allowed to buy flats from the HDB?
*The invited contributors featured in this forum are giving their first reactions to the PM’s speech.
We welcome your comments and opinion as well.
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Ku Swee Yong, CEO, International Property Advisor Pte Ltd.
The immediate impact would be on the prices of resale 3-room HDB flats. Firstly those singles who do not have enough cash and CPF to pay for a resale 3-room HDB flat of about $350k would go for a new 3-room HDB flat where prices are below $250k. The cash and CPF required for a brand new flat are lower than when purchasing a resale flat, allowing the buyer to save up more money along the way as the new flat is being constructed.
Secondly those singles who are planning forward and have the time to wait for the new flat to be constructed will definitely choose to buy new because: 1) they will be buying at a lower price; and 2) they will be getting a brand new product. Which means that 10 years down the road, the capital upside potential is significantly higher.
There will be a decrease in demand for resale 3-room HDB flats from singles, except for those who have the immediate cash and CPF funds and they have no time to wait 3-4 years for the construction of new flats.
Another small dent might be made in the private residential shoebox segment. In the last 3-5 years, many singles who were not yet 35-years of age and the singles who insist on living in brand new properties they own have invested in small studio apartments and shoeboxes. Shoeboxes may cost between $500k to $800k per unit but on a dollar per sq ft basis, they can exceed $1,500psf in the outskirts of Singapore. Given that a new 3-room HDB flat costs about say $220k and the sizes are around 650-700sqft, the dollar per sq ft works out to be around $300psf. How would one argue with paying a much lower price and getting a much bigger space?
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Matthew Matthews, Researcher, Institute of Policy Studies.
A possible relaxation of rules allowing singles easier ownership of HDB flats may support the larger goal of raising fertility rates. In fact it is the perceived inability of finding suitable housing that is a deterrent to marriage. Making it easier for singles in their late twenties to own their own flat might make it less daunting, once they are attached, to seriously consider formalizing their relationship. The wait for a flat will no longer determine how quickly they can marry.
The motivation for singles to enter into marriage has little to do with considerations that marriage will help them realize a home separate from their parents. Rather, the decision to marry is often premised on finding the ideal person who can provide lifetime bliss. For many, marriage is also the ideal institution for child-rearing and so the decision to marry is complemented with intentions to embark on parenthood.
Perhaps if singles can obtain their housing earlier and subsequently be less dependent on their parents and less concerned about parental intrusion, they might be more propelled to search for a life partner. What better motivation to get attached than a messy house that needs an extra pair of hands? The absence of parents in close range will also allow greater opportunity to date without having to be overly concerned about parental wishes.
On the other hand though, it is hard to predict whether a greater ease in single ownership of flats will increase the proportion of couples who attempt cohabitating arrangements. Currently cohabitation is low, partly because of social mores but also because of the difficulty of singles obtaining housing. However social trends elsewhere might influence more unmarried Singaporeans to embrace cohabitation, especially as a trial to marriage. While cohabitation may not deter couples from subsequent family formation, there are other potential implications related to marriage stability and success.
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Ms Bea Wong is a single who has been waiting and watching for the prices in the property market to return to levels that are aligned with the current global economic direction.
I have heard some views in the media that singles could be considered with the HDB upgraders, and be allocated flats in the new instead of the mature estates. I wish to caution that treating singles like second class citizens in this respect would not give the validation that singles rightfully deserve as citizens of Singapore who are born, bred and contributing to Singapore society. Rather than “penalise” singles with such a negative criteria, can’t the Singapore government “encourage” and “incentivise” singles who choose to stay near their elderly parents but in a separate HDB flat? If young families are given a grant to stay near their parents why can’t singles be given the same “carrot”? This would not only reduce the need to build new flats for singles but also serve the government’s purpose of the elderly being looked after by their offsprings.
To answer the question on the “impact” of providing new flats to singles, I would like the government to consider the case of the flats built exclusively for the over-55-year olds. These enclaves foster a sense of community where the occupiers look out for each other. Who knows – if there is an equivalent for singles, the number of new babies might just go up!
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The following is contributed by a Singaporean who is single and is waiting to buy her own flat.
First, focussing on what might be the impact is not the right question or first order question to ask. Rather, we should examine why singles should be allowed to buy flats from HDB. The former is subjective, weighing how it ‘benefits’ singles necessarily brings out arguments of how others (non-singles) would be disadvantaged. It’s a zero sum game.
The latter is objective, and assessing its merits would be value- and principle-based.
It would, for one, significantly concretize the value of ‘inclusiveness’ in Singapore. It has taken far too long to acknowledge that singles make a substantial contribution to the country. Using the pro-family rationale to disqualify singles from purchasing flats from HDB is the anti-thesis of building an inclusive and fair society.
How do singles contribute to the country? Perhaps not to TFR, but certainly to the economy viz GDP; taxes, and correspondingly to all government spending, productivity; taking up jobs which require travel and overseas postings to widen the economic space of Singapore.
Second, from a social perspective, often singles are the ones who care for their parents which married siblings shrink back from after marriage and kids. In fact, although anecdotal, some single women remain single just to tend to their elderly parents. The invisible or unmeasurable ‘output’ is heavy on filial piety, though weighing nothing on GDP scales.
Third, singles also contribute significant time, resources to social good, for eg. voluntary work, philanthropic acts, grassroots activities and social enterprises.
Now, if we must absolutely look at the impact if singles are allowed to buy HDB flats without sounding self-centred and gratifying personal desires, only one thing needs to be said. That the impact would be singles will finally be validated, affirmed and acknowledged by the State as equal citizens as their married fellow citizens.
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Picture by Andrew Loh.