LONG-TERM demographic and population trends could underlie increases in private residential demand and prices, even as low interest rates, a strong HDB resale market and concerns of supply constraints remain at play. The NUS Institute of Real Estate and Urban Studies (IREUS) looks at the trajectory of private housing demand across several decades, through a demographic lens.
The baby-boomer generation – born between 1946 and 1964 – has played a key role in driving Singapore’s housing market since entering their home-buying years in the 1980s.
But as they now progressively exit the residential segment and the economy, and with the number of live births steadily declining since 1998, demographically driven demand for housing may start to slow, says IREUS deputy director Lee Nai Jia. Countries with rapidly ageing populations such as Japan have seen their residential sectors go into a “winter” mode.
Still, this “real estate winter” may not come to pass in Singapore if the shrinking household size, as a result of the growing number of singles, leads to greater demand for housing. That may offset any softening from the drop in populations of future cohorts, Dr Lee says. In addition, if Singapore remains a thriving economy attracting global and local talent, demand for homes ought to stay robust.