Growing challenges in owning a private landed home do not necessarily indicate a d

Growing challenges in owning a private landed home do not necessarily indicate a decline in living standards

Though their proportion of the private housing stock is decreasing, landed home prices have increased significantly.

Dec. 30, 2024

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Does this make life more difficult for young professionals? Due to the high cost of car ownership, many people decide not to get one.

It is difficult to upgrade from a Housing and Development Board (HDB) Build-To-Order apartment to a condominium in the housing market. And even high-income earners may not be able to afford to buy a landed home.

However, many local teachers, doctors, engineers, accountants, civil servants, and lawyers purchased private landed homes in the early years following Singapore's independence, sometimes on a single income.

Having areas zoned for, say, two-story or three-story landed housing helps urban planners in land-scarce Singapore guarantee that there is a stock of private landed homes. 10,735 detached homes, 22,420 semi-detached homes, and 40,385 terrace homes made up the 73,540 private landed homes in this area as of the third quarter of 2024.

It is more difficult to own a landed home, which is mostly only available to locals, because of the steep price increase. Private landed home prices increased 37% between Q4 2019 and Q3 2024, surpassing the 32% increase in private non-landed home prices, according to data from the Urban Redevelopment Authority.

A new 99-year leasehold intermediate terrace home at Bukit Sembawang Estates' Pollen Collection in District 28 might cost S$3.9 million today. This is roughly 7.8 times the average yearly household income of S$500,000. The land area is slightly over 1,600 square feet (sq ft), and the floor area is over 4,000 sq ft.

In the upscale Holland-Bukit Timah neighbourhood, an old freehold terrace home with more than 2,000 square feet of land could cost over S$5 million. Redevelopment expenses are not included in this, as they may surpass S$2 million.

Does the increasing difficulty in owning a landed home here indicate that Singaporeans' quality of life is deteriorating? Not necessarily.

Terraces: old versus new

A landed home that was significantly more affordable decades ago may not be the same as many landed homes that are built today.

Consider a terrace house from a few decades ago. It might be significantly smaller than 2,000 square feet. The floor area is easily doubled in a terrace house at Pollen Collection. A home like this might have five bedrooms, a lift, and attached bathrooms—much more than an old terrace house. Desire a personal pool? Pollen Collection's corner terrace makes it possible.

To put it briefly, new or remodelled landed homes may have more opulent materials and fittings than older landed homes, as well as significantly larger floor areas by maximising the development envelope.

Also, because of Singapore's quick development, public transportation and other facilities are now available in many landed housing estates. In addition to malls and a variety of nearby dining options, residents of landed housing can now easily access MRT stations and buses.

Second, the average size of a household is decreasing in this area. 3.11 people made up the average household size among residents in 2023, compared to 3.5 people in 2010, 3.7 people in 2000, 4.25 people in 1990, and 4.87 people in 1980.

Many condominiums, with enough personal space for each member, arguably satisfy the space requirements of small households.

The separation of generations living under one roof may, in fact, improve the quality of life for those living there. Consider a landed home with two elderly parents, their son, daughter, daughter-in-law, and grandchild.

Three households—the daughter, the son's nuclear family, and the elderly parents—living in separate apartments near each other might improve the wellbeing of all three households.

Superior condos

Three, in an effort to appeal to discriminating and picky homebuyers, developers have been stepping up their game in new condominium projects. It's not unusual to find amenities like luxurious clubhouses, well-appointed function rooms, meeting rooms, and swimming pools that are 50 metres long and have multiple play areas. In addition, a lot of projects have well-considered designs that optimise the privacy and views of each apartment as well as the effectiveness and adaptability of the interior spaces.

Modern families can find three-bedroom condos at around 900 square feet, four-bedroom condos at about 1,200 square feet, and five-bedroom condos at over 1,500 square feet in many new condo developments. Additionally, sustainability features that improve the living environment are embraced by these developments.

Building high-quality condo developments is important as more Singaporeans use non-landed homes to fulfil their private housing dreams. In 2023, 17.2% of resident households resided in condos and other apartments, whereas 4.8% of resident households lived in landed homes. The percentages of resident households residing in landed homes and condos plus other apartments were 5.1% and 6.5%, respectively, in 2000.

Four, households may not want to spend a significant portion of their income on purchasing and maintaining their primary home in this area currently. As life expectancy increases, it is essential to invest money in passive income-producing investments to help meet retirement needs, as many homeowners do not generate any recurring income from their owner-occupied homes.

Owning a home abroad might be a nice addition to living in a small condo or HDB apartment here. Owned homes in Singapore and other countries like Australia, Japan, Malaysia, or the UK may be desirable to certain residents. In fact, some Singaporeans may find that a landed home in Johor, Malaysia, would allow them to realise their dream of landed housing much more affordably.

Many Singaporeans enjoy a high quality of life by experiencing a wide range of things abroad in addition to the conveniences of home because they travel frequently for leisure.

Here, the supply of housing is increasing to keep up with the demand brought on by the growing population and number of households. The supply of landed housing will not likely increase, though, because state land tenders for private housing sites are primarily for non-landed developments. With the exception of executive condominiums, the number of private landed and non-landed homes increased by 0.2% and 14%, respectively, between Q4 2019 and Q3 2024.

Future generations of Singaporeans are likely to find the dream of landed homeownership here more and more elusive. The quality of public infrastructure and non-landed developments will continue to improve, though, and residents will enjoy a higher standard of living even though fewer locals will own private landed homes.