Singapore’s population white paper – a promising report for the real estate marketApril 12, 2013 / By
In January 2013, the Singapore Government released its Population White Paper which provides population estimates for 2020 and 2030 while addressing issues such as an ageing population, a declining total fertility rate, the need for immigration and foreign labour in order to achieve sustainable economic growth, and the challenge of achieving a quality living environment.
As Singapore has a mature economy, future economic growth is expected to moderate. According to the White Paper, GDP growth up to 2020 is likely to average 3-4% per annum and from 2020 to 2030, 2-3% growth is possible. With these growth estimates, Singapore’s economy in 2030 could well be about 80% larger than that of today. However, the future emphasis will be on the quality of growth, capitalising on Singapore’s skilled workforce and its position as a global hub. By 2030, the number of Singaporeans in Professional, Managerial, Executive and Technical (PMET) jobs is expected to rise some 50%, from 850,000 today to 1.25 million, while non-PMET jobs are expected to fall significantly. This change in employment structure, and a shift towards more white collar jobs, would have a positive impact on demand for business space, especially offices, business parks and high-tech industrial premises. It would broaden the investment markets for these real estate sectors as newer and more modern premises were developed, not only in the CBD, but in decentralised hubs as well, which would include areas such as Jurong Lake District, Paya Lebar Central and One-North.
In tandem with moderated economic growth, population growth is also projected to ease to between 1.3% and 1.6% per annum for the current decade and between 1.1% and 1.4% per annum from 2020 to 2030. These growth estimates would result in a total population of 5.8 million to 6 million in 2020 and 6.5 million to 6.9 million in 2030, which is still a steady increase from the current 5.3 million. The resident population is projected to increase from 3.8 million presently to between 4.2 million and 4.4 million in 2030 while the non-resident population is estimated to grow substantially from the current 1.5 million to between 2.3 million and 2.5 million. The increases in both resident and non-resident population would result in sustained demand for both public and private housing, the continuity of supply of which would be vital. To allay fears of housing shortages in land-constrained Singapore, sufficient land has been safeguarded for an additional 700,000 homes (a 58.0% increase from the current 1.2 million) and new housing locations have also been identified, including Bidadari, Tampines North and Tengah.
As population grows and housing supply increases, there will be increased demand for supporting amenities such as shopping malls, healthcare, educational and other community facilities. An enhanced transportation system building on the existing MRT and bus networks will also take connectivity to a higher level. In conclusion, the real estate market has much to look forward to as significant growth opportunities can be expected over the long term.