Homeownership Desire Upgrade Still Strong Among Youths Era Survey
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Farah, a first-time homebuyer who only wants to be known by her first name, will soon receive the keys to her new five-room Build-to-Order (BTO) flat in Tengah in 2028. However, the 27-year-old has plans to upgrade to a private condo once the five-year minimum occupation period (MOP) is over.
“For me, upgrading to a private condo is important because the prices of private properties have been steadily, if not exponentially, appreciating in the past few years,” says Farah in an interview with EdgeProp Singapore. “If I get a private condo, I am assured that my future home will be a better-appreciating asset.”
She believes that purchasing a five-room flat with three bedrooms is the way to achieve her real estate ambition. “My partner and I are expecting to get our first ‘pot of gold’ when we sell the BTO flat, and we plan to use that to upgrade to a private condo,” continues Farah. “Additionally, we wanted the space to accommodate future children or if our parents or in-laws decide to move in with us.”
Farah is not alone in her aspirations, as many Singaporean youths share the dream of attaining material success, which includes owning private property for personal occupation and investment.
While the definition of success may be evolving, home ownership and investment, which are part of the traditional definition of the ‘Singapore Dream’, continue to be key aspirations among Singaporean youths, according to a survey conducted by real estate agency ERA Singapore in collaboration with Ngee Ann Polytechnic, School of Design and Environment, which was published on Aug 14.
The survey also showed that most Singaporeans are satisfied with their current housing arrangements, with 46% stating that they are satisfied and 33% stating that they are highly satisfied.
However, despite the satisfaction, Singaporeans have strong ambitions to upgrade. The survey revealed that 34% of respondents plan to purchase a private condo, 29% plan to purchase a HDB resale flat, while others considered a BTO flat, executive condos (ECs) and landed properties.
In his swearing-in ceremony speech on May 15, Prime Minister Lawrence Wong mentioned the desire of younger Singaporeans for a “refreshed Singapore Dream” that is not solely defined by material success but provides meaning and purpose in their careers and lives. He reiterated the same message during the National Day Rally on Aug 18.
The Gen Z group, defined as those aged 15 to 35, also aspire towards home ownership. The survey showed that 85% of Gen Z respondents (aged 21 to 27) view home ownership as being important, and 35% plan to purchase a property within three to five years. Currently, only 24% of Gen Z respondents own their homes. Of those surveyed, 23% intend to purchase a resale HDB flat, while 59% are eyeing a BTO flat as their first home. Additionally, 59% of Gen Z respondents intend to upgrade to a private condo in the next three to five years.
Hanan Zailani, who is part of the Gen Z group, and her fiancé are currently on the lookout for a four-room resale HDB flat. “It’s a more affordable option for us now,” says the 25-year-old. “But we do have plans to upgrade in the future. I want to upgrade to a five-room HDB flat to make room for future children or family members who wish to stay with us. I think this is achievable if my partner and I continue to work and save money, even though the cost of living in Singapore makes it feel like we have to work until we die.”
Similarly, millennial respondents, aged 28 to 43, also share the strong aspirations of home ownership and upgrading. The survey shows that 35% of millennial respondents aspire to own a private condo. Most of the millennial condo seekers (54%) have their sights set on properties priced between $1 million and $2 million, with 20% looking to spend between $2 million and $3 million.
Another 45% of millennials expressed interest in purchasing an HDB flat, with 62% stating that they are willing to spend between $500,000 to $1 million. Based on HDB resale transactions in 1H2024, 97% of the flats transacted were priced below $1 million. Ms Ong, an individual in her 30s, says that owning a home is a priority for her and her husband. She had to go through four rounds of balloting to secure her five-room BTO flat in the East. “In the first three tries, my partner and I did not get a queue number at all,” she recalls. “But on the fourth try, we did. It’s been a tough journey to get here, but I would do it all over again just to have my own home.”
The survey also revealed that many respondents prefer having at least three rooms in their homes, which highlights the importance of providing diverse housing options, says Pow Ying Khuan, a lecturer at the School of Design and Environment, Ngee Ann Polytechnic. Of the respondents, 19% would like to live in a three-bedroom or larger private condo and another 19% prefer owning a four-room or larger HDB flat. However, some respondents had a preference for houses with fewer rooms.
“Even as household sizes in Singapore continue to shrink, the work-from-home trend is here to stay, driving a greater desire for additional rooms that can be customised for different uses, which is critical for maintaining comfort and quality of life,” adds Pow.
The desire for more spacious homes is, however, offset by concerns about affordability. Challenges such as property prices, high interest rates, property tax, the inability to secure a larger loan, and Additional Buyer’s Stamp Duty (ABSD) continue to limit Singaporeans’ home ownership aspirations.
According to the survey, 25% of the respondents expressed concerns about the affordability of private homes, which is further supported by transaction data for 1H2024. In this period, 64% of non-landed transactions were priced below $2 million, while another 26% were priced between $2 million and $3 million. Furthermore, 26% of those transactions occurred in the Rest of Central Region (RCR).
Furthermore, the survey revealed that the price gap between new and resale homes continues to be wide, with median prices in the RCR and the Outside Central Region (OCR) showing a difference of nearly 37% and 39% respectively. Another 17% of the respondents stated that the high-interest rates have impacted affordability while 16% stated that they have impacted their loan eligibility. An additional 13% of respondents also agreed that the ABSD stands as one of the key barriers to buying their next property.
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“Despite the financial hurdles that potential buyers may face, the majority are still willing to spend to secure their ideal living space, which highlights the importance of home ownership as a cherished goal for many in Singapore,” concludes Marcus Chu, CEO of ERA Singapore.