As shared in the previous article on the 9 important numbers from Singapore in figures 2018, population changes of a country can affect the demand on the residential real estate. I have taken a close look at the recently released population report here from www.singstat.gov.sg. , and extracted some interesting numbers to look at.
1. Population Growth Has Slowed Down
We can see that the population in Singapore has been growing over the years, but the growth has slowed down in the recent years. From 2017 to 2018 the numbers are growing at a slower pace. If you take a closer look at the numbers, the number of Singapore citizens has increased over this period while the number of permanent residents has fallen.
In percentage terms, the total population growth from 2017 to 2018 is 0.5%. Compare this with the years from 2010 to 2016, the growth is definitely much slower.
As the population has been increasing every year since 1990. This could mean that in total, more people need to be housed either for rental stay or purchased for own stay.
Looking closely at the non-residents number, we observed that in the recent years, the non-residents population has dropped. This may indicate a decrease in rental demand, depending on the type of non-residents that are on the decline.
2. Resident Household
From 1970 to 2018, we can see the increasing number of resident household.
The growth from 2015 to 2017 has been above 2%. The growth in resident household may give us an indication on the demand for housing, e.g. people purchasing or owning a property in Singapore for own stay.
3. Household Size
We observed here that the average household size has decreased over the years. Meaning on average, there are less number of person staying in a particular house over the years.
What is the possible effect of the decrease in the average household size?
Lets say the population of a country is 1,000,000. If the average household size is 4, using 1,000,000 divided by 4, then on average we will need around 250,000 houses.
However if the average household size is now 2, using 1,000,000 divided by 2, then on average we will need around 500,000 houses.
If the population stays constant, when the average household size decreases, that may mean that more houses maybe needed. Of course, this is just a very general assumption here. We may still have to consider other factors, for example, are there investors coming in to investing in properties not for own stay purposes etc.
4. Home Ownership Continued to be High
Home ownership in Singapore has continued to be high of more than 90%. Most residents in Singapore would prefer to own a house.
5. Preferred Type of Dwelling
Here we can see that there in an increasing preference for condo dwelling (6.5% to 15.6%) over the recent years (2000 to 2017), while preference for HDB flats has fallen from 88% in 2000 to 79% in 2017.
The table below shows the trends and the break down on the different types of preferred dwelling over the years.
6. More Singles and Staying Alone
Another trend that we observed is the increasing number of singles, and more people are living alone now compared to 2007.
Do note that changes in the population demographic can affect the type of housing in demand. A single may not need as big a house compared to a family. Of course, unless they are staying with parents.
7. Ageing Population
Looking the old age support ratio, our population is aging. Therefore, it is very important for Singaporeans to strategize and plan properly to ensure they can have enough to retire. Relying on children for support for retirement may no longer be very viable if the old age support ratio continue to decline.
Looking at the graphs below, we are also living longer and having a longer life. Thus, when planning for retirement, we need to account for a longer retirement period.
The population report is a very comprehensive document that can provide many insights and indicators towards the future of Singapore’s housing market. If you like to find out more, you can download the report from Singapore Statistic website, or attend one of my future conference for more details.
On a side note, have you heard of Residential Property Price Index? If used right, this data released by URA (Urban Redevelopment Authority) could be a great tool to help us gain more insight of the future housing trend. Read more about Residential Property Price Index