Where Singapore stands
A well-known dilemma amongst Singaporeans is often the cost of housing in the island-state. Besides land price, another factor that affects the costs of housing is the construction costs of the building.
Often elicited as the hub of Asia, Singapore’s cost for construction is at par with South Korea’s Seoul, while other megacities of Asia – Macau and Hong Kong – appear to be competing with the likes of London, far more costly than even the USA.
While Singapore’s houses and construction are no longer categorized as ‘severely unaffordable’ (as cities such as Hong Kong continue to be categorized) as they were in 2013, they do still remain as ‘seriously unaffordable.’
Why costs of construction differs?
Meanwhile, cities such as Kuala Lumpur, Beijing, and Vietnam appear on the lower end of the spectrum of housing and construction costs, averaging less than USD100 per square foot. While the cheap cost of labour is a prime reason behind this phenomenon, the cities lose out on development by taking a step back from modernity: quantity is frequently favoured over quality in housing developments, which often leads to the presence of ‘cookie-cutting,’ that is, structures which are largely similar in nature and appearance, being more clones of one another than individual stand-alone housing structures.
A helping hand
Initiatives by the Singapore government in an attempt to assist those who are incapable of affording housing and construction are apparent, however. Through the Housing Development Board (HDB) in Singapore, many residents increasingly receive grants which allow them to purchase their dream home. Such persons are often either
- First-timers, who are given additional levee when it comes to subsidies on flats, allowing grants up to USD30,000-USD40,000, known as the CPF Housing Grant. Further loans are too available if necessary for prospective house owners. Or,
- Low-income families, who are too provided with the aforementioned CPF Housing grant, as well as bank or HDB loans.
On top of that, Singapore government introduces policies such as ABSD and TDSR to curb property speculation by foreign investors, hence keeping prices low. In fact, according to Bloomberg, Singapore’s housing prices have been declining for the past 13 quarters consecutively.
It is also worthwhile to note that mortgage interest rates in Singapore are also lower than that of other Asian countries such as Hong Kong which can go as high as 5%. On the other hand, the cheapest mortgage rates in Singapore starts at 1.25%.
All these factors helps to make home ownership possible in Singapore.
The right choice
Overwhelmingly, the associated cost of housing and construction in various cities around the world largely depends on the agenda of the government and their housing boards; while cities like Singapore choose to favour progressiveness and a more appealing outlook in their architecture, others such as Kuala Lumpur choose to prioritise merely providing a roof over citizens’ heads.