Singapore is a successful practitioner of "Home Ownership", a policy that not only solved the problem of "housing shortage" in the early years of the country, but also formed a good ladder housing supply system, it is no exaggeration to say that the home ownership rate in Singapore is as high as 90.9%, really It is no exaggeration to say that the home ownership rate in Singapore is as high as 90.9%, which is really one suite per person.
What are the reasons for the high homeownership rate?
Singapore has accomplished the miracle of moving from the third world to the first world in just 30 years, and while doing so, Singapore has not neglected the housing needs of its people and is recognized as one of the best countries in solving the housing problem.
The housing area per capita has increased from less than 6 square feet at the beginning of autonomy to 27.6 square feet in 2015; the ratio of households has remained stable above 1 since it reached 1 in 1985; the home ownership rate reached an all-time high of 93.1% in 2001 and has been maintained at around 90% since then.
Singapore has also formed a housing supply structure with HDB flats as the mainstay and private housing as a supplement.
Over 82% of Singaporeans live in HDB flats provided by the government, while less than 18% of high-income households and foreigners live in private homes built by developers.
The HDB housing stock is diverse, with not only ordinary HDB apartments for low and middle income families, but also better designed, larger and more fully equipped executive condominiums and 3-Gens apartments for "sandwich class" families to meet the multi-level housing needs. With prices less than 1/3 of private housing, residents have less pressure to purchase homes.
Singapore's state-owned land accounts for nearly 90% of the land, and the government has an absolute say in land planning, granting and management.
The Land Acquisition Act enacted in 1966 provides that the government can compulsorily acquire land for public interest purposes and limits compensation to a low level, guaranteeing that the government can acquire large amounts of land at low prices.
Ownership and use rights were separated, and the government transferred land use rights by tender and auction (99 years for residential).
The government transfers land to HDB at low prices to ensure that HDB housing is built in sufficient quantity and at low prices: first, to ensure that there is sufficient land for HDB housing construction, SLA expropriates and supplies a large amount of public construction land to HDB; second, HDB acquires land at much lower than the market price, and HDB housing is sold at much lower prices than private housing.
The housing finance system is based on the Central Provident Fund (CPF), which is a mandatory savings fund, supplemented by commercial loans.
The Central Provident Fund Act clearly states that all citizens and permanent residents are required to contribute to the CPF, with a coverage rate of 95.3% in 2017.
Begun in 1968 for the purchase of HDB flats and extended to private homes in 1981, the CPF system has significantly increased the purchasing power of Singaporeans' homes.
The CPF deposit rate is higher than the commercial loan rate in the same period, and the loan rate is generally 0.1% above the CPF deposit rate, which has remained stable at 2.6% since 1993.
CPF plays two key roles in the purchase of HDB flats: firstly, it supports the government to "build affordable" HDB flats: the Central Provident Fund Board provides indirect funding to HDB; secondly, it makes HDB flats "affordable" to residents: it supports residents to buy their own homes through preferential loans and subsidies.
Singapore's real estate-related taxes include stamp duty, property tax and income tax, which together accounted for S$9.12 billion or 13.9% of total tax revenue and 9.8% of budget revenue in the first two years of 2017.
Stamp duty in Singapore is levied widely and the tax rate is progressive the lower the value of the house and the longer the holding period, the lower the tax rate; at the same time, buying a house in Singapore also requires a distinction between citizens, permanent residents, foreigners and legal entities, and buying a HDB flat in Singapore has tax benefits for its own citizens.
HDB flats can be divided into two types: ordinary HDB flats for low and middle income families, and improved HDB flats for the "sandwich class" whose income exceeds the HDB application limit but cannot afford to buy a private home.
Private housing is mainly for high-income citizens and foreigners who cannot afford to buy a HDB flat, and can be divided into landed and non-landed private housing according to whether they own the land or not.
The home ownership rate in Singapore is extremely high, at 90.9% in 2017. Only citizens with very low incomes and foreigners who are transient residents rent their homes, accounting for less than 10%.
If you are a first-time buyer with a monthly household income of S$3,000 and want to buy a three-bedroom pre-built HDB flat worth S$200,000 in Yishun, Singapore, the government will provide an additional settlement allowance of S$65,000 for every S$431 loan paid with CPF contributions and no additional loan payment for yourself.
If you are a first time buyer with a monthly household income of S$5,000 and want to buy a 4-bedroom HDB flat worth S$350,000 at Garden Waterfront 1&Il in Singapore, the government will provide an additional housing allowance of S$45,000 and a loan of S$1,067 for every CPF contribution you make.
If you are a first time buyer with a monthly household income of S$7,000 and want to buy a 5-bedroom HDB flat worth S$465,000 in Bukit Batok, Singapore, the government will provide you with an additional housing allowance of S$45,000 and a monthly loan payment of S$1,575 from your CPF contribution, with no additional loan payment for yourself.
