Tue, May 09, 2023 page5

• Singapore’s soaring rents are posing political problems

  • Bloomberg
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  Expatriates are not the only ones feeling the pinch of rents in Singapore, which are rising at the fastest pace in the world.

  The pain is trickling down to young single people such as Sonam who are largely shut out of the nation’s subsidized housing program and questioning the government’s resolve to tackle the problem.

  The 33-year-old tech worker, a life-long supporter of the ruling People’s Action Party (PAP), moved to Thailand after her landlord raised her rent by 70 percent for a two-year lease. She plans to support the opposition in the next election.

  

  Private residential housing at Ridley Park and Tanglin Hill in Singapore is pictured on April 29.

  Photo: Bloomberg

  “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 ... it’s just bizarre.”

  For the PAP, solving the housing problem is crucial as the party navigates succession — Singaporean Prime Minister Lee Hsien Loong (李顯龍), son of the nation’s founding father, is preparing to hand power to the next generation of party leaders.

  The party had its worst showing in the 2020 vote despite winning 89 percent 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. The government last month announced a bold move to double the stamp duty to 60 percent for foreigners buying homes — the highest levy among major global cities — while taking other steps such as releasing more land for construction.

  In a national address last week, Singaporean Minister of Finance Lawrence Wong (黃循財) — who is positioned to succeed Lee — acknowledged that prices have soared, but said incomes have kept pace.

  Growing anxieties over property strike at a pillar of government policy dating back to the 1960s that has buoyed six decades of PAP rule — the provision of subsidized housing to about 80 percent of the population, giving Singapore one of the highest home ownership rates in the world.

  While the Singaporean Housing and Development Board (HDB) program has won plaudits around the globe, its eligibility rules generally favor married couples over young single people such as Sonam.

  The government said there was a significant surge in applications for subsidized housing, and that it has taken steps to update policies “to better meet” the diverse aspirations and needs of its population.

  “We are making good progress towards getting the HDB building program back on track,” the ministry said, adding that it is overseeing about 100 projects 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.

  With so many people priced out of the market, demand for rentals has soared. Rents for private apartments and public housing surged about 32 percent and 27 percent respectively last month from a year earlier, although landlords often demand more. Singapore has topped New York with the world’s fastest pace of rental growth for high-end properties.

  A survey last year showed that two-thirds of Singaporeans between the ages of 22 to 29 are choosing to rent due to insufficient savings.

  Belle, a Singaporean content creator renting a shared apartement, would like to see a cap on rent increases. She is also 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 did not 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 subsidized housing program provides some refuge from the soaring prices. The median price of an HDB resale unit is just S$539,000 (US$406,895), compared with S$1.48 million for a private condominium, according to Cushman and Wakefield PLC.

  Although popular, the apartments have strict eligibility criteria. Singaporean families and married couples generally qualify for a new HDB apartment from age 21, while single people generally are not eligible until they are 35. Same-sex couples do not get the same benefits as those in recognized marriages.

  While there is little indication the PAP would lose power in a general election that must be held by November 2025, the party is sensitive to popular sentiment on bread-and-butter issues. Even a marginally poorer showing would be seen as a sign of weakness for a government that has relied on unassailable support at the polls.

  Although Singapore recently passed a budget full of handouts, a majority of residents think it has not handled inflation well, according to a poll by Blackbox Research.

  The government’s approach to housing costs are at the top of the grievances list. Meanwhile, a YouGov poll in December last year found that two-thirds of respondents said the government should place greater focus on housing affordability.

  “The PAP still have a lot to do in terms of assuring Singaporeans that Singapore remains a very good place to live, work and to raise a family,” 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 halted during the COVID-19 pandemic. While the government has since pledged to expedite 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. A new pilot program offering hostel-like public housing for low-income singles was likened to prisons.

  Sonam would like to see the government lower the HDB age requirement for single people. A Workers’ Party lawmaker last year proposed dropping it to 28.

  The housing market could soon cool as new units come online, with almost 40,000 public and private completions due this year.

  Prices in the private market are expected to rise about 2 percent to 3 percent next year, only slightly higher than the pre-pandemic rate of 1.3 percent, said Wong Xian Yang, Cushman and Wakefield’s head of research for Singapore and Southeast Asia.

  Even with the latest stamp duty increase, Sonam remains unconvinced.

  “It still doesn’t take away the lack of housing,” she said. “It still doesn’t take away that our only option now is to buy a shoebox at a crazy price or rent.”
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