Rise Private Home Ownership Among Those Under 35

Housing affordability improves, but 27% of Singaporeans spend more than 35% of income on housingHousing demand and prices may hit a plateau in two years: Redas SINGAPORE (EDGEPROP) – According to Lee Sze Teck, senior director of data analytics at Huttons Asia, there is an increasing trend of younger buyers opting to purchase a private condo as their first home. He estimates that around 30% of buyers of new private homes are 35 and below as compared to 20% five years ago. This shift in preference can be attributed to the flexibility and less rigid nature of private homes as compared to HDB flats or Executive Condos (EC). Lee also points out that potential gains from selling a private home are significantly higher than those from an HDB flat. Between 2009 and 2Q2024, the prices of private non-landed homes in the Outside Central Region (OCR) have increased by 149.1%, while HDB resale prices have only increased by 87.9%. The number of young residents under 35 years old staying in private homes has been on a steady increase since 2011, with 380,459 such residents recorded in 2023, a rise from 375,651 in 2022. The desirability of private homes in terms of facilities, lifestyle, exclusivity, and investment opportunities has been a major factor in attracting younger home buyers, says Christine Sun, chief researcher and strategist at OrangeTee Group. Lee from Huttons highlights that housing affordability has improved in the first half of 2024 when compared to median household incomes. In 2023, the median household income was $10,689 per month. Lee believes that younger buyers with a budget of $1.2 million to $2 million can opt for a two-bedroom unit, which translates into saving around $10,000 to $20,000 a year for at least five years. This, coupled with their CPF contributions, will be adequate to cover part of the downpayment for their private home. Sun from OrangeTee advises potential home buyers to be cautious of overspending on housing while overlooking other costs, such as childcare fees and other expenses for households with children. This could result in very little left for other necessities, which is why it is essential to purchase a home within one’s financial means and avoid overleveraging, thus preventing financial strain due to excessive debt.

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