What Lion City can teach Hong Kong for its 2018 budget
A standard three-bedroom property in Hong Kong costs at least HK$10 million - four times what an apartment of the same size costs in Singapore
One positive element of the budget announced by the Singapore government on Monday was its decision to increase the Proximity Housing Grant (PHG) by 50%.
The move is extra incentive for young people to give more caregiving support for elderly parents or relatives to offset the unexpected hike in the residential property tax from 3% to 4%.
Finance Minister Heng Swee Keat said the Proximity Housing Grant, rolled out in August 2015, will be increased by 50%. An individual who buys a Housing Development Board flat near their parents will be entitled to a grant of S$15,000 (US$11,405) – up from S$10,000 previously, while their family would get S$30,000, up from S$20,000.
And that will now apply for parents’ homes up to 4km away, which is double the distance previously applicable for the grant (2km).
That should be a significant boost to the public housing market in Singapore, which is famous for providing affordable housing – three bedroom apartments cost an average of about S$300,000.
An update from the Housing Development Board last week revealed that about 12,000 households made use of the Proximity Housing Grant – a quarter of the 50,000 resale transactions between August 2015 till December 2017.
This is a policy that people in Hong Kong – its “rival” hub within the region – could only admire. Despite an increasingly tight housing policy, Hong Kong has trouble balancing its property prices, which have been more than doubled over the past six years.
A standard three-bedroom property in Hong Kong costs at least HK$10 million – at least four times what an apartment of the same size costs in Singapore.
To make things worse, it takes at least eight years to live in a public housing estate in Hong Kong. So, the issue in Hong Kong is more about the availability of housing, rather than proximity, although residents in Hong Kong also have to deal with an aging population and taking care of elderly family members.
Singapore had a low fertility rate of 1.2 births per woman in 2015, which was about half the global average. Worse, the proportion of people aged over 65 was the same as those under 15 for the first time in its history.
It is nice to see Singapore is able to address the issue of filial piety, a cornerstone of Chinese family culture, at the start of the Year of the Dog.
For those of us in Hong Kong, we can’t wait to see how the government will address these vital issues of housing and family duties when it unveils its next budget on February 28.