Soaring property prices are a political hot potato for governments across the world as they face a young population struggling to fulfil, or even forced to give up, their dream of owning a home.
South Korean Daniel Ko, who is married with an 18-month-old son, has been trying to buy a home since May but failed eight times.
The 29-year-old researcher tried bidding for a slot in a housing priority scheme known as boonyang, which allows homebuyers to book a soon-to-launch apartment based on certain criteria.
Being newlywed with a child should boost his chances, but the competition was just too stiff.
The highest application rate for Seoul is 163 applications for one apartment – double that of last year’s.
In the nearby Gyeonggi province where Mr Ko lives, the highest rate is 28 – slightly lower than last year’s 30 but still competitive
The average size of an apartment is 105 sq m, usually a three bedroom unit.
"In popular big cities, the boonyang price ranges from 500 million won (S$578,927) to 1.5 billion won but we can only get a loan for 20 to 40 per cent. This is a burden for newlyweds and low-income families," Mr Ko told The Straits Times. "The government should lower property prices in popular areas and reduce loan rates to help young couples."
As South Korea nears the presidential election next March, access to affordable housing has emerged as a major issue that could swing millennial voters towards or against the ruling Democratic Party (DP).
A recent study by the Korea Society Opinion Institute showed that one in four voters believe the biggest challenge facing the next president is housing market stability.
Average property prices in Seoul have skyrocketed since President Moon Jae-in took power in 2017 and more than 20 rounds of cooling measures have failed to curb speculation.
The average price of an apartment in Seoul hit 1.1 billion won in April - up from 607 million won four years ago.
Cash-strapped millennials - born between 1981 and 1996 and aged 25-40 - were badly hit.
Dashed dreams of home ownership, coupled with disillusionment with the DP, drove many to vote in anger against the party's candidates in mayorship by-elections for Seoul and Busan in April, causing the party to lose both seats by wide margins.
Confidence in the party has also been shaken by two major land speculation scandals. One involved the state-run Korea Land and Housing Corp, and the other implicated DP's presidential candidate Lee Jae-myung who approved a housing project as mayor of Seongnam city in 2015.
He has denied giving preferential treatment to the owner of an asset management firm that reaped massive profits from the project while the city government suffered losses.
Mr Lee has vowed to make real estate reforms his top priority if he gets elected.
The main opposition People Power Party's presidential candidate Yoon Seok-youl has promised 2.5 million new homes if he gets elected, out of which 300,000 would be small apartments to be sold below market price to first-time buyers in their 20s and 30s.
Elsewhere in the world, housing is also a key election issue.
Tax credit for first-time buyers
United States President Joe Biden pledged a tax credit worth up to US$15,000 (S$20,500) for first-time homebuyers. That could be a game-changer in some areas, especially the South and Midwest where property values are generally lower than in coastal cities. A Bill was introduced in Congress in April.
In Canada, Prime Minister Justin Trudeau, whose Liberals won re-election with a minority government, promised to introduce a two-year ban on foreign homebuyers.
Governments have also stepped up restrictions in a bid to bring down property prices exacerbated by the pandemic.
In Beijing, authorities are planning to roll out a pilot property tax programme. It is part of the drive for common prosperity - the current phase of economic development where more focus is placed on redistributing wealth.
As President Xi Jinping said, "homes are for living in, and not for speculation".
While there are no nationwide taxes on residential property, Shanghai and Chongqing started levying them on urban homes as part of an experiment in 2011. It was hard to gauge the effects given that the tax rate was low, and there were many exemptions, economists told ST.
High property prices, particularly in first-tier cities, are a common complaint among younger Chinese, who want to start a family in cities where they were not born in. The high costs are also partly why millennials are delaying childbirth and even marriage.
China's home ownership is 90 per cent, based on central bank data. But the cost of an apartment in Shenzhen - China's Silicon Valley - is 43.5 times a resident's average salary.
Beijing has been trying to prevent its asset bubble from bursting, but bringing prices down will not be a popular move as many have their wealth tied up in property.
In Hong Kong, pricey homes and a long wait list for subsidised public flats are problems that the government wants to solve but have failed to do so. Home ownership is far beyond the reach of the millennials and has been cited by some as a factor in the 2019 mass protests.
Developers are building even tinier nano homes to keep them affordable. For instance, in T Plus in Tuen Mun, the smallest apartment in the block is 128 sq ft, smaller than a car park lot that is around 130 sq ft.
Secretary for Development Michael Wong said in October that the government will soon launch a study on flat sizes. This could mean setting a minimum size for private homes at slightly more than 210 sq ft.
He had noted that the average living space per person in Tokyo is 210 sq ft, 260 in Shanghai, 270 in Singapore and 300 in Shenzhen.
The median per capita floor area of accommodation of all domestic households is 161.5 sq ft, the 2016 population by-census said.
In South Korea, it is the lack of savings that plague millennials.
A survey last year showed 70.6 per cent of them wanted to buy a house, but 73 per cent found it difficult to save enough. Another study said it would take up to 100 years for an average person in his 20s to save enough to buy a home in Seoul.
Mr Ko, who is staying in a rented apartment, said he had "secretly wished" that his parents would buy him a house. "But my parents would rather put their money in existing investments than help us, they want us to work for what we need," he added.
Affordability and inclusivity in housing policy are key issues for young Singaporeans
The young are increasingly vocal against parts of the housing policy outside of the traditional family nucleus, such as only allowing singles to buy a Build-To-Order flat at 35.
BY GOH YAN HAN
Housing has not been one of the most politically-charged issues in Singapore for the past decade, but the twin factors of rising prices and accessibility of home ownership means it could return as the topic du jour by the next general election.
Pandemic-related construction delays meant that young home owners have had to put off getting their keys and starting families.
Those who have instead looked to the resale market have seen Housing Board or HDB flat prices rise to record highs this year, throwing up questions of home affordability for the younger generation, said property experts.
Chief executive officer of real estate agency OrangeTee & Tie Steven Tan noted that the demand for Built-To-Order flats has increased significantly since 2019, with the ratio of first-timer applicants rising from two to three times between 2016 to 2018, to between four and five times from 2019 to date.
Should home prices continue to creep up and perceptions form that people are getting priced out, there may yet be echoes of the 2011 general election, when housing affordability dented the People's Action Party's electoral performance, said NUS sociologist Tan Ern Ser.
Agreeing, Lee Kuan Yew School of Public Policy senior research fellow Ng Kok Hoe said: "Singaporeans have always been sensitive to cost of living issues… We should expect housing costs to continue to weigh on people's minds - and on electoral behaviour."
What is different this time, however, is a growing emphasis on fairness in access to home ownership, over even that of affordability, said Dr Leong Chan Hoong, associate professor at the Singapore University of Social Sciences' Centre for Applied Research.
The pandemic and shift to working from home means people now think of home as not just a roof over their heads, but also as an office and an essential own space, he said.
To millennials, "the root of it is whether they feel they have been given a fair chance at home ownership and what used to maybe be a privilege is now considered a right".
The political compact has always been that if you are a family and legally married, you deserve an apartment, he said.
"But now this is where you can find tension - on one hand we want to maintain the sanctity of marriage and want to give priority to these families but on the other hand how can the Government not support or be perceived to not support millennials who want to achieve their housing aspirations," he added.
The young are increasingly vocal against parts of the housing policy outside of the traditional family nucleus, such as only allowing singles to buy a BTO flat at 35, experts noted.
The Housing Board's control over who gets to buy subsidised BTO flats through its eligibility criteria is likely to come under increased scrutiny, said Professor Chua Beng Huat, a sociologist with the National University of Singapore (NUS).
"The criteria are effectively rules of exclusion, such as (of) unmarried single mothers," he said.
"In a society that is increasingly concerned with 'fairness' and 'justice', exclusions will be seen as 'unfair' and 'unjust'. "
One example is the exorbitant capital gains made by those who sold their units at Pinnacle@Duxton, who are already among higher wage earners, noted Prof Chua. This has been seen as undeserving and unfair.
The "unfairness" has generated public outcry which has caused the government to respond with the new Prime Location Public Housing model, he said.
Flats launched under the new model come with a subsidy clawback clause upon resale and owners will be subject to a 10-year minimum occupation period, up from the five years for other flats, before they can sell their flats on the open market.
The new model is meant to ensure that new public housing in prime, central locations will remain affordable, accessible and inclusive for Singaporeans and discourage those looking to flip for a substantial windfall.
Dr Ng noted that housing policy has, in the past, shown responsiveness to the public's cost concerns.
He added: "Over time, the position of singles in the public housing system has also improved, albeit slowly. But the treatment of single 'never married' parents and lower-income families remains problematic.
"The narrow definition of "nuclear family" disadvantages single parents in terms of housing access and cost. Limiting subsidised rental flats to one- and two-room flat types means that lower-income families' space needs are often not met."
This, of course, does not take away the reality that housing remains a limited resource, said Dr Leong.
Public policy must then ensure that housing as a basic need is met, all the more so for families with the least resources, said Dr Ng. This will provide a secure and conducive environment for family life and child development, especially for the most vulnerable in the community.
The Government has made efforts to address this - for example through the Enhanced CPF Housing Grant of up to $80,000 that was announced in 2019. Under the grant, close to $500 million has been disbursed to 15,600 first-time flat buyers as at end-2020.
Another example is the Proximity Housing Grant of up to $30,000 which was rolled out in August 2015. It has doled out $748 million to about 40,200 households as at end-2020.
IMPACT ON FUTURE ELECTIONS
NUS sociologist Tan Ern Ser said housing issues could affect the incumbent People's Action Party's electoral performance in the near future if familiar gripes persist.
Past elections have seen housing play a critical role, in particular the 2011 general election which was deemed a watershed election.
Then, immigration and cost of living, including housing affordability, were hot-button issues that affected the popular vote garnered by the PAP, said experts.
Subsequently, Mr Khaw Boon Wan, the new Minister for National Development then who took over Mr Mah Bow Tan, introduced a whole slew of policy changes.
These included delinking the pricing of new flats from the 20 per cent market discount from equivalent resale flats, increasing the supply of new flats sharply as supply had been stagnant before, and increasing housing grants to low-income first time buyers and lower- or middle-class families who needed to upgrade, said Prof Chua.
"All the changes caused prices to decline gradually. The pay-off to the government was a resounding increase in popular votes in (the 2015 general election) and almost knocked off WP from Aljunied GRC," he added.
Housing has not played as significant a role in elections since then. For example in 2020, the hot button issues were jobs, competition from foreign professionals and the need for diverse views in Parliament, noted Dr Tan.
"Though some of the opposition parties did press for policy changes in regard to Sers, housing for singles and single-parent families, lowering the prices of public flats, expanding rental housing eligibility, and doing away with the Ethnic Integration Policy," he added.
Under the Selective En bloc Redevelopment Scheme (Sers), residents are compensated for their existing homes and given discounts on brand new flats.
Dr Leong said that going forward, with the increase in population size and the current restrictions from the Covid-19 pandemic, labour shortages and skyrocketing cost of materials, the supply side of housing could be another angle for housing to take the stage again at the general election.
On the topic of Sers and lease decay, these are currently less relevant to Singaporeans than rising HDB prices and the lack of supply, said Mr Tan. These topics could become more pressing further down the road as certain precincts or estates grow older, he added.
Dr Ng noted that problems may arise then as the current range of measures, such as the Home Improvement Programme, Sers and Voluntary Early Redevelopment Scheme, cannot entirely address concerns.
He said: "A possible response is to introduce more tenure options by expanding and diversifying the public rental sector. Compared to the traditional ownership model premised on incomes from long, continuous and stable careers, this may allow people more capacity and flexibility to deal with economic volatility."
