According to industry reports from all around the world, the millennial generation is abandoning homeownership in record numbers, choosing to continue to rent property rather than become homeowners.
And while there are a variety of different factors that play a role in this shift, factors that have been bubbling just under the surface for a decade or more, the truth of the matter is many millennials are abandoning homeownership just because the cost of purchasing a home – and then maintaining it – is prohibitively expensive.
This is especially true in places like Singapore, where nearly 18% of the millennial generation report that they have absolutely zero plans whatsoever to move out of their parent’s homes and properties, mostly because of unaffordable and unattainable real estate prices.
Real estate values are on the rise
Even though the bottom really dropped out of the global real estate market in the mid-2000 and took a long time to recover, it is rapidly and aggressively climbing to values higher than we’ve ever seen before – all while millennial employment rates drop all over the world.
This has led to a tremendous inflation in the cost of owning a brand-new home, even in places like Singapore where property values haven’t jumped quite as high and wages are higher than most other developed nations.
Nearly 83% of millennial’s (people aged between 18 and 35 years old) do not own a home right now and do not intend to purchase one within the next five years, though many of them would love nothing more than to join the ranks of homeowners if they had the opportunity and the money to do so.
Things are looking like they are poised to turn around soon
Of course, because there are fewer and fewer people purchasing property, and because people just don’t have the kind of cash on hand to pay exorbitant prices for properties and homes, the market is currently going through a bit of a correction.
It’s unlikely that prices are ever going to drop quite as low as they did in the mid-2000 when the real estate bubble popped and values went to right down through the ground, but prices are projected to go lower than they’ve been in five years or so before the end of 2018 – and that’s likely when the industry will start to see millennial homeownership rates climb higher than they’ve ever been before.
Singapore expects that nine out of 10 millennials will eventually own their own homes (just like previous generations have), though they do anticipate and expect this to take a bit longer for this millennial generation than it did in the past.
As usual, the Singapore government and business community is always looking for ways to find new benefits, new pathways to homeownership, and new loans and funding sources for those that want to own property. This is, after all, one of the most business friendly nations on the planet and will continue to be for years and years to come!
Morris Edwards is a content writer at companyregistrationinsingapore.com.sg, he writes different topics like Millennial Entrepreneurs in Asia, Importance of a Business Plan for Entrepreneurs and all topics related to Entrepreneurship and Singapore Business Incorporation.