Singaporeans are so proud of their public housing system that they run tours of it for tourists. Jasmine Wong is a guide. Photo: Oliver Jacques.
Singapore has a radical approach to housing many Australians wouldn’t understand.
It sees homes as a form of shelter, rather than a money-making vehicle for investors.
Crazy, huh? The small island nation may not have negative gearing, but it’s achieved a home ownership rate of 90 per cent. It’s also extremely rare to find people sleeping on the streets.
Rather than having more housing inquiries, white papers and summits, Australia only needs to look to our northern neighbours for inspiration on how to tackle our housing crisis.
A key difference between the two countries is how we each view the concept of public housing.
When you say the phrase in Australia, it conjures images of Shazza and Dazza from the SBS TV show Housos – unemployed single parents living in rundown fibro shacks on the outskirts of Sydney and Melbourne in singlets and thongs.
Our governments have gradually divested from residential property markets. They now own less than 4 per cent of all houses. Stringent eligibility criteria restricts it to renting out its diminishing pool of dwellings to its poorest and more marginalised citizens.
In Singapore, though, public housing dominates the property market and is used extensively by both the middle class and well-to-do.
The government-run Housing and Development Board (HDB) manages 77 per cent of the homes in the country and it both sells and rents out its assets. This means most of the country values it and wants to see all the assets properly maintained.
The HDB is driven by social goals, rather than a profit motive, and housing is heavily subsidised and affordable to all income brackets. The strong presence of government prevents the private sector-driven skyrocketing prices we’ve seen in so many of our cities over the past two decades.
Australia will never reach the dizzy heights of Singapore’s home ownership rates – it’s too late to do everything they’ve done. Besides, there are too many vested interests here and looking down on renters is too much a part of our national identity.
But if we want to at least ensure a whole generation of young people is not forever priced out of the market, we need to start moving in the general Singaporean direction by making our public housing sector much bigger and more dynamic.
Public housing units in Singapore can look like swish hotels. Photo: Oliver Jacques.
Economist Dr Cameron Murray has suggested creating an HDB-inspired public developer in Australia he calls Housemate, which would buy or acquire underutilised land, build houses on it and sell them to citizens at discounted prices. He also suggests letting people use their superannuation to buy homes (as they do in Singapore), arguing that home ownership is the most important ingredient for a secure retirement.
Dr Murray has busted the popular misconception of how we solve the Australian housing crisis – that by reducing red tape and encouraging the private sector to build more dwellings, we’ll get lots more homes at cheaper prices. He points out that it’s not in the property sector’s interest for prices to fall, so even if they get planning approvals quicker, they’ll drip feed developments to stop that from happening.
That’s why he believes the government-run Housemate is the answer, saying his proposal could cut home prices by up to 35 per cent.
This is also why many resist such supposedly radical ideas. Around two-thirds of our population are homeowners, so critics say the majority would never tolerate policies that would lower the value of their biggest asset.
But how much do rising house prices really benefit the average Aussie homeowner? My house has increased in value from $350,000 to $700,000 in just five years. So what? It’s a roof over my head. If I sell my house, I’d just have to buy one somewhere else in an inflated market.
Sure, if you own multiple homes and can sell off your investments, rising house prices are fabulous. But only 15 per cent of Australians own more than one house. More than eight in ten of us own either one house or no house, so we don’t really benefit from this property boom – especially since so many parents are having to help their children get into the overpriced market.
Lee Kuan Yew, the founder of modern Singapore, championed the HDB model because he realised that turning housing into a game of Monopoly for wealthy investors was not a recipe for long-term economic success.
He was no bleeding-heart socialist, but he was smart enough to know that secure housing is the bedrock of having a productive population and thriving business sector.
If you’re constantly in rental stress or fearing homelessness, you’re more likely to struggle at work, less likely to be innovative and you’ve got Buckley’s chance of tackling any health, gambling, drug or other problems you may have. The Singaporeans quickly discovered that investing in housing can save taxpayers from having to spend in so many other areas.
Housing has been a colossal policy failure in Australia. Non-stop price rises have forced millions of our fellow citizens into a life of stress and hardship. Tinkering at the edges and further inquiries won’t fix this – it’s time we learnt from those who have got it right.
