SINGAPORE: The pressing question on everyone's mind: Are new citizens the driving force behind Singapore's surging housing demand? Analysts are pointing to a significant factor that may be overlooked— the growing number of ageing citizens. At the recent Teck Ghee Citizenship Ceremony on March 9, Senior Minister Lee Hsien Loong revealed that Singapore grants citizenship to approximately 22,000 individuals annually.

Ageing Citizens: A Booming Influence on Housing Demand

Research conducted by Sky Seah, a senior lecturer at the National University of Singapore (NUS) Business School, indicates that older Singaporeans are increasingly shaping housing trends. Astonishingly, the headship rate among those aged 65 and above has climbed to 52%, meaning one in every two households in this age group contributes to the increasing demand for housing.

Ms. Seah highlighted that many seniors are opting to live independently, welcoming their grown children back into their homes, or adjusting their housing needs as they build wealth over the years. "Household growth indicates housing demand, driven largely by adult population growth and rising headship rates," she explained.

A historical look between the years 2009 and 2024 shows this demand fluctuating considerably, from as few as 200 households to as many as 47,100 yearly, with an average annual growth rate of about 1.85%.

New Citizens and Permanent Residents (PRs) Statistics

According to data from the Department of Statistics, Singapore observed an influx of about 25,200 new citizens in 2024, a slight increase from 23,472 in 2023. The number of new PRs remained consistent, estimated at around 35,000 for both 2024 and 2023. Except for a notable decrease during the pandemic, these PR numbers have mostly remained steady over the years.

Interestingly, the adult resident population has faced more significant fluctuations, with changes peaking in 2009 at 74,754 and dropping dramatically to around 30,000 by 2020. Excluding pandemic factors, recent growth in the adult population has largely stemmed from non-residents, shifting the focus towards rental demand and attracting the attention of property investors.

Demand Remains Strong Amidst Local Influences

Notably, Tricia Song, head of research for CBRE in Singapore and Southeast Asia, highlighted that February recorded the highest developer sales in 13 years, underscoring robust local demand. Lee Sze Teck, data analytics senior director at Huttons Asia, noted that 92.4% of new home buyers comprised Singaporeans, while PRs accounted for 6.9% and foreigners a mere 0.7%.

Furthermore, homeownership in Singapore surged to 90.8% in 2024, rising from 89.7% in 2023. However, the percentage of HDB residents also showcased a slight decline, from 77.8% to 77.4%, suggesting a trend of upgrading to private properties.

Concerns Over Affordability and Market Stability

As rental supplies increase and rents stabilize, the pressure of property as an attractive investment remains. Yet, Ms. Seah warned that rising costs paired with factors like inflation, mortgage rates, and various governmental measures could hinder accessibility for younger households. The changing household formation rates, especially among those under 35, further emphasize potential affordable housing challenges.

With heightened home prices posing risks, experts like Ms. Chia have cautioned that rapid price increases could trigger government intervention, affecting both sales and future pricing stability. Mr. Wong also added that while current conditions maintain demand for private homes, high-interest rates and global uncertainties are expected to moderate this demand in the long run.

As the landscape continues to shift with the introduction of the 60% additional buyer's stamp duty for foreign buyers, interest in high-value properties in the Core Central Region is likely to reflect new local and PR buyer trends.

In conclusion, while new citizens certainly contribute to housing demand, the ageing population emerges as a silent yet substantial force, reshaping Singapore's housing market and laying the groundwork for future trends. What does this mean for you? Stay tuned as we delve deeper into the implications for prospective buyers and investors!