The middle class nightmare

Posted on 09 February 2011

The government can do more to reduce the price of property in Singapore, alleviating the financial challenges faced by a large middle class.

By Fang Shihan

The outlook for average Singaporeans can be scary, especially considering the high cost of living. Photo: WILLIAM CHO / Creative Commons

IT’S probably a universal phenomenon. Fresh graduate comes out into the working world, draws his first paycheck, and wakes up one day a few months later breaking out in cold sweat.

It’s the middle class nightmare. You know, the one where you’re taking a photo at the main door, spouse in arm, kids running around at knee level. You flash a hugeass smile as you look proudly into the camera feeling like your life is absolutely perfect.

And you wake up feeling horrified at how you’ve transformed into a mindless automaton in the economic machine. You also feel ashamed at desiring the perfect middle class life because you’ve been taught in school that it’s all a damn construct.

We all have the same nightmare. But here on the island it’s a little different. See, friends in Australia or countries with a larger land mass feel their skin crawl at the sight of a house with a lawn, a dog and…. a white picket fence. Here we dream about a three-room flat in Punggol with a steel gate, a view hopefully not of the neighbour’s kitchen and…. a maid.

I remember growing up in the 90s listening to the debate about Singaporeans and their 5Cs- cash, car, condo, credit card and country club. Fast forward 20 years later, we’re not even dreaming of the condo anymore. We’re dreaming of a flat. Friggin little cubicles built so close together that you become paranoid about your neighbours eavesdropping while you have sex at home.

Were we ever supposed to aspire to public housing?

MP Mah “Your Assets will Appreciate!” Bow Tan wrote a piece sometime last year reiterating that “the Government’s basic principle… is to provide affordable public housing for the vast majority of Singaporeans – not just for 10 or 20 per cent, like most countries, but up to 80 per cent of the population.”

The government has obviously forgotten about the initial proposal of ‘public housing’ and above all, what constitutes as ‘affordable housing’.

The logic to co-opt Singaporeans under the public housing umbrella undeniably made sense back in 1960, where slums and squatter settlements were aplenty. After all, a housed, clothed and fed worker was a more productive worker. Public housing also made for a good social control mechanism but.. let’s not get into that.

But the past is the past. As the saying goes: “Last time policemen wore shorts”.

There are no slums now save for a small group of happy campers at various beaches and parks. However there’s a large middle class with aspirations for social mobility.

Does it make sense for the government to co-opt these aspirations into the public housing system? More importantly, SHOULD the government even try to cater to the middle class family with a household income of $10,000?

Thanks, but I’d rather not the HDB have a monopoly of the housing market on the pretext of housing provision.

When I describe the HDB to my friends abroad, they’re usually in awe of the efficiency of the system. Homeless rates are close to zilch, that’s quite a feat. Then I tell them about how much an average flat costs and almost certainly, jaws drop in shock. $300,000 for a tiny 3 room flat??? Yes Siree, and I haven’t even gotten to COE prices yet.

Here’s my take on why housing HAS to be increasingly expensive: To keep 80% of the population within the arms of the nanny state and to a lesser extent, to keep the upper middle income class politically subservient. Imagine being within the $10,000 income bracket. Too rich for public housing yet too poor to afford a million-dollar condo. Would you be pissed? I would.

And the solution? Executive HDBs. Because that’s considered ‘affordable housing’ for a family that’s not-quite-there-yet.

Just to prove that this is not just a gigantic conspiracy theory, think about this. In a situation such as this, would the logical solution be to reduce the percentage of those living in public housing, and to free up more land for private development?

Condos are obviously more expensive than HDBs, in large part because of land prices. But instead of passing policies to reduce the prices in the private market, what’s happened is that the public sector trying it’s darndest to match the private sector. And everything goes up up up.

The government has obviously forgotten about the initial proposal of ‘public housing’ and above all, what constitutes as ‘affordable housing’.

This post was written by:

- who has written 230 posts on New Nation.

Contact the author

  • Norma

    So you mean the government is pushing out higher priced products (i.e. the CEO flats) which are bringing up the price of the whole housing market? but still I have to say SG has really one of the best housing policies in the world given its density :) And talking about subservient people – we in HK are all enslaved by the big land developers! > < sigh…

    • Shihan

      they’re taking their 80% ‘quota’ quite seriously and pushing the private developers to fight for the tiny bits of land allocated for private use. And lo….the prices of condos go up and so do HDBs. Because they’re priced according to ‘market prices’.

      • Jim

        I think, though, they are more subject to market manipulation. However, who can stop all these manipulation by speculators?

  • Dan

    My take is that the government has obviously looked into the current grp of potential new home buyers. 20 – 30 year old who has probably 1 or 2 siblings and parents who will die off conveniently in abt 20 yrs time. If prices can be kept at a certain band and with inheritance from their parents assets. This group will be placated in the near future. This is assuming that growth will be a constant but all hell breaks loose if we have another financial crisis or worst still, another SARS situation. Then whatever talents that you can attract will bolt out of the front door in an instant. We will be left carrying the baby.

  • MBT

    I hv lived in 3 rm HDB before. Actually, it’s nice, functional and compact if you know how to do it up.
    Importantly, great environment and facilities or amenities which the gov in constantly improving.

  • Tat

    i have travelled to a few places for work, namely Taiwan and Hong Kong. I would have to say that the quality of our housing and price is really much cheaper as compared.

    For eg, my Taiwan friend was superbly impressed with our HDB and asked most of them if they are condos/private houses instead.

    with regards to the “middle class”, how do you define that? i would actually be more specific and term the most “stretched” people as “1st generation graduates’.

    i came from a family with mthly household income of ~2k sgd for most part of my life. parents working hard 2 shifts as factory workers to send us to Uni with high expectations that the degree that change things.

    Not exactly true….

    • Shihan

      Most non-Singaporeans are impressed with our housing system. I’m not denying that. But wait till you see their faces when you tell them how much government housing costs.

      My parents were born poor too. They worked their way up and achieved their dreams. But our generation’s not so fortunate. Social mobility has decreased tremendously in the past 10 years or so. Remember when people used to aspire to condos? Now we’re finding HDB prices ridiculous. Now we’re aspiring to move out when it really should be a norm just to stay sane.

  • Fox


    Our housing is cheaper compared to HK’s but it is no more affordable because their salaries are higher. Quality housing is not an area where HK exactly shines. Taipei housing is expensive but that’s because it’s Taipei you are talking about. In other cities, apart from Hsinchu and Kaohsiung, housing is much cheaper.

    In the last two years, property prices have been rising faster in Singapore than anywhere else in Asia, apart from China.

    But I agree with you. The newer flats are quite nice (no chutes built into the kitchen) but they are smaller. 4-room flats are not as big as before. I grew up in a 4-room in the Taman Jurong area and I feel it is somewhat bigger than the newer ones my friends own.

  • whatever

    1. No worries, there will be another major recession in about 3 years time. When that happens, property prices across the board will drop as well. Of course maybe you’ll be praying & volunteering paycuts just to keep your job (but that’s another story). Imagine, during 2003 SARS you could have bought a 4-rm HDB in point block in central Toa Payoh, just next to the library and 4 min walk to the MRT for just $270K. Now you’ll need to offer way over $500K for the owners to even blink.

    2. If you’re recent grads and your combined salaries already $10K, then congrats — you’re in the top 5% of your cohort, on the way to the elite class that PAPies so love. If you’re confident and expecting your salaries to eventually boom to $50K or $100K per month, then just close eyes and buy a resale HDB and plan to buy additional investment condos a few years down the road (remember recessions are the best time to buy investments). What kind of resale HDB you buy depends on your value system. If you think prices are ridiculous now but die-die need to buy your own pad, then just buy the cheapest 3-rm HDB that you & your spouse can live comfortably in (check out the neighbourhood closely!). If you’re Warren Buffet-stingy, then simply stay with parents or in-laws for time being. Remember, major recessions occur every 4-5 years and nowadays will be shorter due to shorter business cycles and inefficient govt meddling.

    3. I had an acquaintance who hit above the combined $8K salary limit for new HDB. So he quit and took on a lower paying job in order to qualify. That’s what he said anyway. He could have struck a deal with his boss for less monthly pay but make up with special extra cash bonuses — who knows? HDB just sees your declared official monthly pay. Without the mass import of foreigners depressing our salaries, we will definitely see more salary fraud & semi-fraud cases, as couples beh-deh their incomes in order to qualify for new HDB or new EC. As it is, $10K combined for a young couple is like at least 2 standard deviations i.e. rare. Ya I know it’s possible with 2 young lawyers or 2 young doctors hooking up, but law grads and doctors are already quite rare with PAPpy controlled quotas. And not all law grads get good starting pay.

    • Shihan

      Friend. PAPpy doesn’t quite cut it for sarcasm. Would be linguistically less lame if you stuck with ‘PAP’ and worked on being witty instead.
      ~2 cents.

  • mackinder

    It isn’t rare to have a combined income of 10k. Any graduate couple working for at least 5 years, will be around that band.

    • Shihan

      Completely disagree. And I’m a graduate. Would you like to prove otherwise?

      • mackinder

        Well, the baseline for my personal network is approx > 4k for people who have been working for 5 years. These are average folk who are looking to get married, and facing a problem with applying for new HDB flats.

        • Shihan

          My network varies from the broke to the ones >$5k. We probably need to qualify the definition of ‘work’. How about those holding a day job and running a company by night? :) Or freelance copywriters who work from home?

          You might want to qualify ‘any graduate couple’ with ‘any graduate who’s worked 5 years in the same organisation climbing up the hierarchy’.

          Not everyone leads that life.

          • mackinder

            You are correct, not everyone leads that life, but that doesn’t preclude that those who do, do not matter or are to be removed from consideration under policymaking, yeah?

            The point I’m trying to put across is that while there are people who are unable to afford the flats, there is a sizeable amount of people who are facing the income cap dilemma.

  • whatever

    The article is talking about “fresh grads” not those already working for at least 5 years. Average starting pay for grads is around $2.8K, provided you have a relatively in-demand degree and in “higher value” industry i.e. not social work etc. Many fresh grads are forced to accept $2.5K starting pay or even less, thanks to never-ending influx of indian & chinese bachelors and masters holders. Of course, there are outliers like a friend who got $5K basic starting pay in a financial institution with potentially $300++K bonus (he served 2 internships with them as undergrad and must have impressed some powerful bosses inside). But we’re talking about the average joe “fresh grad” at most 2 years out of school. For these group (the majority), just apply for new 4-rm HDB BTO. You can easily work off your mortgage in 20 years or less, provided you keep at your jobs and don’t screw up. Some of these will be more lucky or more enterprising and see super-normal increase in their incomes — these will be the ones buying condos or landed property in 5-10 years time.

    If you’re expecting a nice landed property with white picket fences and 2 3000cc saloon cars as justifiable reward for beating the 18-year student rat-race and “working hard” for 4 years in Uni, then you need to venture overseas where higher salary jobs are available and costs may be lower (not true now in major cities of Oz and Canada — their house prices are as crazy as S’pore).

  • Sloo

    Note: we may live in them but we don’t own any of the Hdb flats

  • mackinder

    Re: Whatever–>

    I believe the white picket fence is just an analogy used to describe the whole notion of the Dream, an its equivalent in Singapore.

  • auntielucia

    I’ve always said, HDB should just look after the bottom 20% of the nation. Period. Let the other 80% take care of themselves. Read my blog post on this here.

    I don’t know abt Taipei but HK housing for the bottom 80% while not great (as compared to Sg) is so well integrated that all amenities r easily within reach, even without a car! I cld go home fm Causeway Bay to Taikooshing, just to make sure I have a clean loo and all within 30 minutes!

  • Landon Leo

    Pardon me to say this, but IMO this discussion can go one forever if we NEVER find the root cause of all these problem(s). The problem does not lie on the govt. As much as I disagree with our govt, I would want to defend them here.

    The real problem lies with how the world economy is shaped today. This is why the most of what our govt can do is to respond as well as they can. But the fundamental problem will never go away no matter how much ‘patch work’ one does.

    On an individual basis, what I regularly do to advise young graduates is to be prudent and ‘sly’ with their education and financial decisions. The key is to understand the goal of politicians while still young, avoiding ‘financial enslavement’. You will not believe me if I tell you 50% or more of the courses in NTU/NUS/SMU/SIM are ‘created subconsciously’ with political agenda in mind.

    There are a couple of known solutions. 1- Do what China is doing. 2- Revamp the entire world economy and banking system, starting from US. The s***’s got to go!

    • mackinder

      Maybe you are right, the key issue is that people do not take ownership of their lives adequately, and tend to follow the herd (or state policy trends) in education and financial decision-making.

      E.g choosing the right courses that suit you, and making the right prudent financial choices and not getting carried away with unnecessary spending.

      • Landon Leo

        Choosing the right courses aren’t necessary the right choice, since the course themselves are already in question. e.g. seeing people fock to study tourism.

        Admittedly, let me tell you an (supposingly open) secret.

        Real education regarding a certain sector does not lie in what is taught in schools. It will NEVER be taught. If it is taught, then ‘everyone will be rich’. They only want to teach enough to ensure ‘someone works for them’. The real education can only be obtained by 1-experience, 2-personal mentorship (depending largely on the mentor… if he is willing to tell you the truth of the matter) 3-personal experiment/research

        • mackinder

          That’s a roger. Truth be told, why give up the competitive advantage, if any? I’m not about to spoonfeed anyone.

          • Landon Leo

            Because there is nothing called ‘competitive advantage’. If you think about it carefully.

  • X movies

    Well, 1 thing I simply hate is that Pay And Pay had brainwashed all of us since young to study, grow up and then work our lives off in a very artificial lifeless environment! Some more housing prices are ridiculous!

    Eat work sleep, eat work sleep and not time for ourselves. U call that world class living ? F!

    Now that i’had quitted my job 2 yes ago and started my own business, i felt alot freeier, happier and secure! PAP stop treating your own citizens as JOB robots!

  • Anthony Neo

    My father does not have an “O” level, he works as a supervisor in a plastic injection factory. My mother is a housewife looking after my two brothers and my sister.

    We lived in a rental flat till my father when brought a three room flat direct from the HDB, I was around 10. In five years my father paid upbthe flat and decided we should move to a bigger one because we are all growing up. He used his second chance and brought another flat direct from HDB, this time it was a 5 room flat in Tampines. Guess what, he managed to pay the levy and also the flat in 5 years. In both cases my father get to see and safe keep the title deed of his flat. He does not have an “O” level andy mother is not working.

    Me and my wife are both from the Polytechnics, we have two boys and have to take up a 25 years loan when we first brought our Exec Flat direct from the HDB. After changing houses a few times, we finally managed to paid up our mortgages and get to hold the title deed for our Tampines Exec Flat.

    Whenever I compare myself with my parents, I always wonder am I getting better? Are we progressing?

    • Landon Leo

      IMO I had thought about the same lines as you. I would say no, we aren’t better. Majority of our parents ‘caught’ the market at the right time.

  • IInotStupid

    The situation has gotten out of hand. If you are willing to go hungry for a few months, venture to other countries which doesn’t have Singapore’s serious problem: land. The quality of life in Singapore cannot be as high as any other country with larger land mass. Without land, you won’t get quiet HDB neighbourhoods. Singapore has overtaxed its land. Flats are getting higher. And standard of living is getting worst as we packed more and more foreigners into this overcrowded island. It’s getting less conducive. Even the train drivers are making VERBAL announcements in the morning to tell Singaporeans and newly annointed foreign citizens to move to the centre of the car.

  • IInotStupid

    If you take a trip to the Singapore Discovery Centre, you will a new propaganda at work, targetinig the primary and secondary schools students. They play a video with hypnotic video edits to remind Singaporeans of their past, tagged with the dialogue of a returning Singapore family who worked overseas but chose to return to Singapore because Singapore is safe. They also inserted subliminal messages of identity and the need to take in foreigners. This government runs on propaganda. And they start it at schools. They don’t get their teachers to do it. They get their teachers to bring their kids to the Singapore Discovery Centre to do it through subliminal videos. And the best part of it: no video recording are to be made of the subliminal video. They are targeting impressionable youths.

  • Conor

    I think you are blaming the government too much for this. There is unquestionably a property bubble here and every Singaporean who owns a HDB and then goes on to buy a Condo _in addition_ to their HDB is contributing to it. Likewise all the foreign buyers too. Talk to any real estate agent and they’ll have stories of Indonesians etc turning up to view a condo and writing a cheque for whatever crazy price without even blinking. Foreigners are not solely to blame though, they see a bubble which won’t deflate too much any time soon and are happy to cash in.

    Is the HDB concept a legacy which should be discontinued (i.e. no new HDB developments)? Maybe.

    However I can’t blame HDB or the govt solely. Other factors include:

    – Greed (local and foreign speculation)
    – Immigration (pushing up rental prices and thus encouraging the greed of local and foreign owners)
    – The mentality that a young married couple _must_ own their own home asap. I am a foreigner (in case it’s not obvious :oP ) and the only Singaporeans I know who rent are the edge cases – people who want independence and are willing to pay for it out of their own pocket. If more locals rented maybe the govt would be under pressure to do more about the insanely high rents here, which are both a result and a cause of the property bubble. The obsession with owning a home (not a crazy illogical obsession, but an obsession nonetheless) forces this rat race mentality which makes young couples jump at the first mortgage and first affordable property they can get. This can become cyclical:

    Property prices increase -> Young couples rush to buy their own property asap -> This demand pushes prices up further -> More increases make more people anxious to get on the property ladder asap -> This fuels yet more increases. etc. etc.

    Just random thoughts from a native of another country that is recovering from a recently imploded property bubble :o)

    • Shihan

      Great reply there Conor.

      However, upward social mobility is no longer manifested in property buying habits. It’s true that Singporeans used to buy HDBs, then condos, then maybe landed housing, but there’s a huge price gap between the HDB and the condo now partly due to the shortage of land and huge (and increasing) demand for private housing.
      It’s less possible to make the jump from HDB to private housing now.

      The reason for the obsession to own a home is largely due to rental prices (quite the opposite of your hypothesis). It simply doesn’t make financial sense to spend $1000 a month to rent a room when you could save this money, and own a property in the long run. Unlike non-Asian friends, there’s less shame or embarrassment when you tell others that you still live with your parents even at age 30.

      BUT obviously everyone still wants their own pad. Thus the current angst over property prices which will not translate into massive social upheaval anytime soon.

  • Vasu

    I think the current Govt has lost the plot and have shot themselves in the foot. Now they have little choice but to do what they are doing or bear the brunt of an angry mob if the home prices are reduced and the value if their CPF dollars fall as a result.