An expat guide to home ownership in Singapore

The unique feature for mortgage particularly housing finance in Singapore is the role of the mandatory saving scheme, Central Provident Fund (CPF).

The home purchases in Singapore are mainly financed through the use of Central Provident Fund (CPF). The Colonial British Government introduced the national funded pension scheme, CPF, on 1^st July 1955.

The relaxation of the CPF regulation has allowed residential property purchases in mid 1970s for public housing and early 1980s for private property. The total amount of withdrawals for housing has increased by about 14 fold in its peak in 1999 as compared to the year 1981. According to the Singapore Census 2000, the scheme has become very successful in promoting home ownership whereby 92% of the Singaporeans own a home.

Home Ownership In Singapore

Singapore’s home ownership is segmented into two types like private home ownership and public home ownership. Between the two, the public home ownership sector is the dominating sector accommodating 81.3 percent of total households from low income to upper middle-income groups.

The public housing system is strictly under the authority of the Housing Development Board (HDB), which covers duties such as housing production, housing management, housing finance and formulation of housing policies.

The public home ownership sector is divided into three sub-sectors as follows

•          The public new housing sector.
•          The HDB resale market.
•          The HDB executive condominium market.

In the new housing market, the dwellings are newly built and are sold at subsidized prices.

The private owner-occupier housing market accommodates less than 10% of the total number of households. There is an indication of rising private housing stock, which increased from 14% in 1989 to 18.1% in 1999. The private sector receives comparatively less subsidies from the Government and thus is less regulated.

Article taken from Economy Watch