SINGAPORE: Are new citizens behind Singapore’s rising housing demand? Analysts suggest that ageing citizens, not just new citizens, are driving this growth. Senior Minister Lee Hsien Loong announced at the Teck Ghee Citizenship Ceremony on Mar 9 that Singapore grants citizenship to around 22,000 individuals each year.
Ageing citizens driving housing demand
EdgeProp Singapore reported that Sky Seah, senior lecturer at the National University of Singapore (NUS) Business School, pointed to an increasing number of older citizens, with the headship rate among those aged 65 and above reaching 52%—one in every two households—a strong contributor to housing demand.
Ms Seah said that these households have added to housing demand as more seniors choose to live on their own, welcome grown children back home, and adjust their housing needs after building up wealth.
“Household growth reflects housing demand, driven by adult population growth or rising headship rates,” she noted.
Ms Seah noted that the annual increase in the number of households, which indicates housing demand, varied widely between 2009 and 2024, ranging from 200 to 47,100 a year, with an average growth of about 1.85% annually.
New citizens and PRs
Data from the Department of Statistics showed that Singapore gained around 25,200 new citizens in 2024, up slightly from 23,472 in 2023 and 23,082 in 2022. The number of new citizens has stayed relatively stable over the past 16 years.
Meanwhile, new permanent residents (PRs) stood at about 35,000 in 2024, similar to 34,500 in 2023 and 2022. Except for a dip to 27,470 in 2020 due to the pandemic, annual PR numbers ranged between 29,850 and 33,435 from 2012 to 2021.
In comparison, Singapore’s adult resident population, those aged 20 and above, saw bigger changes, peaking at 74,754 in 2009 and dropping to about 30,000 in 2020. Ms Seah noted that excluding the pandemic’s impact, most post-pandemic adult population growth came from non-residents, driving rental demand and property investor interest.
Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield, explained that foreigners must obtain PR status and hold it for at least two years before they are eligible to apply for citizenship.
Currently, PRs pay a 5% additional buyer’s stamp duty (ABSD) when purchasing their first home. Mr Wong said, “Most PRs intending to buy a home would have done so upon obtaining PR status rather than waiting to secure citizenship—unless they plan to purchase a landed property, which is restricted to Singapore citizens.”
Strong local demand remains the key driver
Tricia Song, CBRE’s head of research for Singapore and Southeast Asia noted that February saw the highest developer sales for the month in 13 years.
Lee Sze Teck, senior director of data analytics at Huttons Asia, said Singaporeans made up 92.4% of new home buyers, while PRs accounted for 6.9%, and foreigners recorded only 11 transactions (0.7%). He also noted that the 2,658 units sold in January and February this year marked the strongest start to the year since 2013.
Chia Siew Chuin, head of residential research at JLL Singapore, added that strong local demand “remains a key driver” in the city-state’s housing market. She explained that strong demand comes from local buyers who prefer to own homes. Singapore’s culture values homeownership, and many see property as a safe long-term investment, even during global market changes.
Homeownership in Singapore rose to 90.8% in 2024, up from 89.7% in 2023. Meanwhile, the proportion of HDB dwellers fell slightly from 77.8% to 77.4%, reflecting a trend of residents upgrading to private property, as per data from the Department of Statistics.
However, if population growth is mainly driven by non-residents, Ms Seah noted, with foreigners facing a 60% ABSD, rental demand is likely to increase, at least in the short term.
Affordability concerns
Despite more housing supply easing rents, Ms Seah said demand for property as an investment remains strong.
Ms Seah noted that while household formation in Singapore has stayed relatively stable for 20 years, factors like inflation, government subsidies, mortgage rates, salaries, and unemployment levels also affect housing demand.
Unemployment has stayed low between 2% and 3%, and while household income has grown, global inflation and mortgage rates are expected to decline.
Ms Seah added that falling headship rates among younger households—with rates for adults under 35 and those aged 35 to 49 declining for the past three years—may indicate growing affordability challenges, while asset-rich older households are likely to keep driving demand.
Ms Chia warned that rising home prices remain a concern, and if prices increase too quickly, the government may introduce cooling measures that could affect sales and prices.
Mr Wong added that while demand for private homes remains steady due to low unemployment and strong household finances, high interest rates and global uncertainty are likely to slow demand. However, projects offering good value, either through attractive prices or prime locations, should still perform well.
The Core Central Region (CCR), where property prices tend to be higher, is also facing challenges after the 60% ABSD for foreign buyers took effect in April 2023.
Ms Chia said foreign participation in CCR non-landed sales dropped from 15.8% in 1Q2023 to between 3.7% and 6.6% per quarter in 2024. Now, demand in the CCR mainly comes from wealthy locals and PRs who still see value in these properties, she said. /TISG
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