The ageing Singaporean population equation and Iskandar

Many countries, especially the more developed ones are facing an ageing population. Thus, many are trying their best to attract talents from overseas. One country which is certainly extremely aggressive in attracting overseas talents is our neighbour, Singapore. Honestly, if they do not succeed in attracting more new talents, it may face a bleak future. According to an article by Ryan Khoo in The Edge Property dated 22 December, the old age support ratio (OASR) was 6:1 in 2014. This meant that there are 6 working adults for every retiree. Well, within 14 years plus, by 2030, this would fall to just 2:1 If this happens, the pressure on the government is going to be huge! Statistically, every 3 persons whom you meet in Singapore by 2030, one is a retiree!

Of course Malaysia is not too far away in terms of an ageing population. Read here: 2015: Fertility rate dropped to 1.9 for Malaysia It was mentioned in the article that by 2030, there would be a total of at least 900,000 residents aged 65 or higher. I hope these senior citizens get to enjoy their life and not continue to work in the food courts as dish-washers as what I could see every time I am in Singapore. One thing which the proactive Singaporean government is focusing on is to increase the population from current 5.4 million to 6.9 million by 2030. Most of these would have to come via immigration. These new population would be increasing the pressure for housing. HDBs are controlled by the government and yet the prices of the secondary ones are already considered high today.

Throwing in another 1.5 million new population and a ratio of 1 HDB flat to 3 meant that another 500,000 units are needed. Well, total units to be launched by HDB in 2016 is 18,000 units as per reported recently. Assuming a 20,000 units per year meant that within the next 14 years, the HDB would only be building 280,000 units. Yes, majority of these talents may just come from Malaysia and in this case may choose to work in Singapore but stay in JB. Thus, not as many units are needed, perhaps. However, IF these HDB units are really in shortage and housing must be found, the only choice would be Iskandar. This does not mean that the property prices in Iskandar would hit the moon. It meant however that the total number of units being built that everyone is saying as way too many may just be sufficient if nothing huge happens in Iskandar from now till 2030.

To know what will happen actually, I would have to wait another 14 years. To take advantage of what may happen? If you are a Malaysian working in Singapore today, it may be best to buy a unit in JB instead of renting a room in Singapore. To ignore whatever is happening and focus on saving more S$ and buy somewhere else in Malaysia to retire in future? That’s a good plan too. Just make sure you really save instead of using the stronger currency to go for Happy Hours in Singapore or even movie tickets every week. You see just one pint of beer and a movie ticket per week would meant that we have spent S$30 and one year, that’s RM5,000 per year! (conservatively, without including on and off two pints or two movie tickets since your girlfriend may be watching with you….)  Happy working, saving and investing. It’s our future.

 

written on 10 Jan 2016

Next suggested article: Iskandar as Singapore’s output hub, seriously

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