Singapore — Owning one’s own place is a challenged in land-scarce Singapore in the best of times, but the pandemic has made things harder for those who are looking to purchase their own place.
There has been a delay in Built-To-Order (BTO) flats because of a labour shortage since the number of migrant workers was lessened due to the pandemic.
And even for some who already have BTO flats in the pipeline, the usual wait of three to four years has extended to six years, according to a Sept 26 report in the South China Morning Post.
The report adds that the usual Plan B for acquiring property, which is to look to the HDB resale market, is also proving to be challenging, as resale flats have also escalated in price. In the past 14 months, prices have increased steadily, with the HDB resale price index “just 0.1 per cent off the record high of 149.4 points set in April 201.”
However, the problems due to a delay in housing may have repercussions down the road.
The report quotes National University of Singapore sociologist Dr Tan Ern Ser as saying, “Housing issues could also affect fertility rates, increase the rate of population ageing, and lead to a shrinking population.”
It may also result in a disgruntled segment of the population.
“If a significant number of people feel left out, excluded, unfairly treated, or lose hope in the future, it would erode the social compact and trust between the government and an important segment of society,” he added.
What has also caused a delay in finishing BTO projects is that a sizeable portion of migrant workers from India and Bangladesh, who make up the bulk of Singapore’s construction workers, went home last year and have not been able to return.
A number of current BTO projects are delayed by as much as one year, said International Property Advisor chief executive Ku Swee Yong, and this delay has driven the price of resale flats up.
The SCMP report quotes the head of research and consultancy at real estate firm ERA Realty, Mr Nicholas Mak, as saying “With supply chain disruption, some people might not be prepared to face the uncertainty of a longer waiting time, so they turn to resale flats, which pushes up their prices.”
This year, between January and August, 19,141 resale units have been sold, and almost 40 per cent increase from the same time in 2020.
Prices are up as well, with some prices more than ten per cent higher than in 2020. Some Sengkang units are going for as much as $680,000. It may reach a record high this month, industry experts say,
”The situation is likely to continue until the supply chain disruption is resolved,
The government is trying its best to increase supply but the supply chain is facing headwinds. And as public housing is the most basic type of housing, to reduce demand is impractical because everyone needs a place to live,” said Mr Mak.
/TISG