FEASIBILITY OF A 30 + 30 YEAR RESIDENTIAL LEASEHOLD TENURE

Abstract

The strong aspiration for Singaporeans towards home ownership and the increasing wealth of many Singaporean families in land-scarce Singapore over the past few decades have resulted in an escalation of home prices. There is a heightened perception among households that their homes also represent investments, the values of which will increase over time. The high property prices in Singapore have saddled many homebuyers with high debtservicing with regard to their mortgage loans. This raises the policy issue as to whether there is a need for the government to revise its housing policy to separate the investment component of housing from the consumption component. This empirical study has been carried out to determine whether existing homeowners and prospective homebuyers are likely to accept a 30 + 30 year residential leasehold tenure. The survey findings from among a sample of 250 respondents suggest that it would be feasible to introduce a 30 + 30 year residential leasehold tenure, even if the price is fixed at 60% of its 99 year leasehold value. Pricing-issue aside, prospective homebuyers who are in the younger age group, with lower income and currently residing in their parents' or relatives' homes are most likely to accept the idea of a shorter leasehold tenure. Male respondents who are current homeowners and in the age group of 40 - 44 years are most likely to accept the level of pricing pegged at 60% of its 99 year leasehold value.