Jamus chats with residents.
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Over the past few weeks,
#TeamSengkang worked our way through 351B, 355A, and 334C
#Anchorvale. We also threw in visits to the 303 coffeeshop and the newly-opened 339 Village, over different weekends.
One recurring pain point that many have shared has to do with the price of HDB flats.
#SengkangGRC has not been exempt from this, with reports of million-dollar apartments on the market. While these examples are undeniably outliers, they do more than color perceptions of rising costs of living. They are, rather, symptomatic of deeper concerns Singaporeans have about the affordability of our homes.
Parliament has debated this matter on several occasions over the past few years. The position of the government is that incomes have kept pace with home prices, once grants for BTOs are taken into account. The
#workersparty position, in contrast, is that our public housing is increasingly unaffordable, raising fears that young Singaporeans may be left out in the cold (or the heat and rain, as the case may be) when it comes to shelter.
What explains this difference? If one looks at the house price-to-household income (HPIR) ratio—a pretty standard metric of affordability—Singapore’s hovers around 4 (it has risen somewhat in recent times, but it’s in the ballpark). But why we differ in our beliefs about affordability is important to understand.
For starters, our take on the HPIR is classified by neutral observers—such as the Demographia Index of Housing Affordability (
http://www.demographia.com/dhi.pdf)—as “severely unaffordable.” Taking first-timer grants into account may soften this somewhat, but this only gets us to being “seriously unaffordable.” It’s hard to shake the reality that homes here are unaffordable; putzing around with subsidies only makes things less bad.
Furthermore, household income here almost always corresponds to a two-income household (we have among the highest female labor force participation rates worldwide). So, while families in other countries are able to make ends meet with one breadwinner (or two, but with one working part-time or taking time off for maternity or care for kids or parents), that’s almost impossible here. The need to take on work also adds to expenses, such as childcare fees, or pay for a domestic helper.
And unlike elsewhere, Singapore has no hinterland to move to, for those who may prefer lower housing costs at the price of greater inconvenience. Even what some may consider to be ulu neighborhoods now boast HDB resale prices that are eyewateringly high by global standards for large cities, which basically means little respite for those who have no choice but to live within our nation’s borders.
Finally, let’s not forget that what folks are paying for in an extended lease, with transfer rights. While some may view this as interchangeable with a real estate asset, the reality is that what one pays for will eventually (and inevitably) depreciate, and expire worthless at the end-of-lease. So while a house in other expensive global cities may even appreciate in the long run and become an asset that can be passed down to future generations, this is not the case with our HDB units.
For these reasons, we think that the HPIR should be closer to 3 (what the index regards as “affordable”), which would go a long way toward easing the burden of starting a home. This is especially so for many young Singaporeans, who often feel priced out of the market, right at the point of graduation. This has implications not only for their cost of living, but also gives rise to undesirable consequences, such as postponing the age where they settle down and start a family, or how rooted they feel to their home country.
#makingyourvotecount
