HOUSING FOR SINGAPORE �S SANDWICHED CLASS

Abstract

The Housing Development Board (HDB) has been highly successful in providing affordable public housing to the masses. 82% of Singapore’s population is now residing in subsidized public housing. This research examines the feasibility of housing for the “Sandwiched Class” to be provided for through the private sector on the grounds of maximizing economic growth and reducing the reliance of people on public housing. Housing aspirations, mobility, affordability and accessibility for executive condominium residents will be used as the factors for analysis. Both qualitative and quantitative approaches were used to provide a balanced viewpoint. Interviews were done with executive condominium residents in the eastern region of Singapore. In addition, quantitative research was done through accessibility and affordability models, price differentials and the back of envelope analysis. Key findings from the analysis show that residents chose to reside in executive condominiums mainly due to the attractive pricing, location and layout of the development rather than the availability of the $30,000 CPF housing grant. The biggest challenge in financing home ownership is the ability to afford the 20% cash down payment. In addition, a price gap of at least 20% existed between executive and comparable private condominiums. Furthermore, an average profit margin of 20% was achieved for government allocated sites whilst in land tendered sites; the average profit margin was only 7%. It can thus be concluded that housing for the “Sandwiched Class” can be provided through the private sector. However, this is at the expense of lower profit margins for developers.