Population Swings and Your Property Prices in Singapore

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TOTAL POPULATION

Singapore Citizens + PR + Expats (employment passes) + Working Permit

holders.

SINGAPORE RESIDENTS

Singapore Citizens + PR


SYPNOSIS

As you can see, there are only about 3.2m Singaporeans and the annual

growth rate last year was 1%. Most of this 1% growth, I would attribute it to

new births, with maybe a 20% of this 1%, or 0.2% coming from PR

converting to become Singapore Citizens.


The growth rate of Singapore citizens have been fairly stable at a low rate of

1%.


Last year, there were 4.8m of total population, a 5.5% growth rate over the

previous year.




By looking at the chart, you will see that years 1987 and 2003, total

population growth (In BLUE) was negative.




IN 1987 - PROPERTY PRICE CRASH?

In 1987, the total population drop reflects the exodus of working permit

holders and Expats on employment passes. Singaporeans and PR growth

slowed, but still in the positive ~1.5% range.


IN 2003 - PROPERTY PRICE CRASH?

In 2003, the total population drops, coupled with a drop of Singaporeans and

PR. Most Citizens usually stay put in Singapore. In 2003, it is suspected that

even PRs are leaving Singapore in droves coupled with Expats and working

permit holders leaving.


WHY IS THIS STATISTIC EVEN IMPORTANT?

I think it is important because from a historical standpoint, Foreigners who

come to our shores to work do not have strong emotional attachments to this

land. Many come for work or follow their spouses here. In the scenario of

reduction in jobs, many expats will be the 1st to leave the country. If they

leave, it represents an immediate vacation of the properties they used to

occupy.


From the data, it shows that PR while more likely to stay in Singapore are

not immune to leaving when push comes to shove.


MAGNITUDE

1.2m of the population are foreign, that means 1 in 4 person on the street is

foreign.

From a Property Demand stand-point, this is significant because we are

talking about a Foreign population of 1.2m people of which an estimated

400,000 are expats, some 800,000 are workers or various types.


For expats, if we assume 2 person per household, we are talking about

200,000 units in housing demand.

For the rest 800,000, an estimated 400,000 are domestic helpers (who

stayed with their employers), while the rest are lower educated workers

working factories, service outlets, etc.


These 400,000, assuming 3 person per household, will take up 133,333

units of housing, or in the form of room rentals (1 per room), HDB rentals,

lower end condominiums shared amongst several person.


Our Private property housing has been built with a view to catering to foreign

demand. The growth in Supply of housing has exceeded the 1.5% growth

rate of Singapore citizens and Singapore PRs in the past few years.


Therefore this makes the entire property market more volatile and

susceptible to price movements with the IN and OUT flow of foreign

population in Singapore.


MOST SINGAPOREANS OWN (Mortgage) their homes

Most Singaporeans own their homes. So the rental market is largely catered

to migrant and expat population. Sudden IN flows of foreign population

forces the Rental rates to go UP and an exodus leads to rental rates to go

DOWN.


Rental has a BIG and very direct correlation to the property prices, therefore

POPULATION SWINGS in the forms of Expats COMING and LEAVING the

country will subject first our rental prices to swing, followed closely by

property prices.


IN 2009???

In 2009, the total population has run up a lot while Singapore Citizens and

PRs have only grown at 1+%. Given that the foreign population in Singapore

now numbers 1.2 million, any exodus will immediately impact the rental

market as it is assumed that very few expats own the properties which they

stayed in and the rental market will impact the property prices.



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