According to estimates by Pramerica Real Estate Investors in 2011, Singapore has the highest institutional-grade real estate market value per capita in the world (US$46,346 per capita ). Rapid increases in real estate prices and rents in excess of GDP and income growth have triggered concerns over the cost of real estate. Singapore’s unique model of housing development and housing finance has led to one of the highest rates of home-ownership in the world, and a high concentration of residential property assets amongst Singaporean households (50% of household balance sheets as at 2Q2012 ). The combination of a policy favouring home-ownership as well as its financing via home-owners’ CPF contributions has created a significant investment orientation in the housing sector, with academic studies pointing to a negative effect of housing price escalation on consumption expenditures.
The aim of this Closed-Door Discussion is to stimulate ideas and feedback that can contribute to the current debate over Singapore’s real estate policies. The discussion will examine whether Singapore’s economy and society are unsustainably invested and exposed to real estate, and consider the policy options available to improve the system.
Professor Phang Sock Yong of the School of Economics, Singapore Management University will present some perspectives on how housing policies could have affected consumption and investment, with implications for human capital and corporate investments as well as retirement financing. Going forward, the structural, cultural and institutional constraints from the past may pose limits to policy changes. Professor Deng Yongheng, Director of the Institute of Real Estate Studies and Professor of Finance, NUS Business School will be the respondent.
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