90 percent


90 percent of Singaporeans do not own their homes. We have a 90 percent home ownership rate which means that 90 percent of the residential units are owner-occupied, not 90 percent of Singaporeans own homes. The technical definition of home ownership rate is the percentage of homes that are owner-occupied, not the percentage of the population owning their homes.

90 percent of the residential units in Singapore are owner-occupied because most of our housing comes from HDB which provides only housing for sale most of the time. (HDB provides a very limited stock of rental housing.) Home ownership rate will always be very high in Singapore so long as HDB is the chief supplier of housing and it does not build homes for rental.

There is no direct link between the rate at which HDB supplies housing and the home ownership rate. Make no bones about it. The government is screwing up the supply of housing with its BTO system and this has nothing to do with the home ownership rate as Josephine Teo was trying to imply.

Access to housing is one of most important factors in household formation, and limited access to housing is one of the main reasons why fertility rates have collapsed in Taiwan and Hong Kong.

One of the reasons why people delay their marriage in Singapore and many other East Asian countries is because they need to accumulate more economic resources to buy housing compared to their parents. In countries like Australia and Germany, housing can be easily accessed through the mass rental market which does not exist in Singapore because of government policy to build only flats for ownership. This means that young people in Australia and Germany can get their own housing before or immediately after getting married. In contrast, the average new couple in Singapore have to wait 3 or 4 years.

The local media usually assert that Singapore has a high home ownership rate, higher than most developed countries like Australia and the US, and that it is a good thing when in fact, the home ownership rate tends to fall as national income levels increase. The home ownership rate is generally higher in lower-income countries than in developed countries. For example, countries with the highest home ownership rates include India, Bulgaria and Romania, not exactly your shining beacons of economic success.

What the local media fail to explain is that a 90 percent home ownership rate means that 90 percent of houses/apartments are owner occupied (i.e. the owner lives in the house), not that 90 percent of Singaporeans own their houses. Yet, the term is used all the time as if 90 percent of Singaporeans have their own homes. The 90 percent home ownership rate has no bearing on the quantity or quality of housing enjoyed by Singaporeans relative to the citizens of other countries like Australia and Japan. It simply refers to the mix of housing type in Singapore.

There is considerable truth about the housing situation in Singapore.

Singapore has approximately 1 residential unit to every 4.3 inhabitants while countries like Japan, South Korea and Taiwan have a ratio of around 1 unit to every 2.5 inhabitants. Even in land-scarce Hong Kong, the ratio is around 1 to 3.

The artificial scarcity in housing availability is a deliberate policy in land use rationing. Part of the reason for this artificial scarcity is to keep land and housing prices high since Singaporeans are so heavily over-invested in real estate via the CPF which limits the options for investing household savings. The idea to use housing as the primary tool for household savings is a deeply flawed one since housing is an essentially non-productive asset unlike “green field” assets like machines and factories. Instead of investing our savings in technology and training, we use our savings to buy concrete shells in the sky. No wonder Singapore’s productivity growth is so low.


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