New singles rule could draw the pink dollar: analysts (The Business Times [Singapore])
20 Jul, 2005
NON-RELATED singles can now use their Central Provident Fund savings to buy private properties together.
This change to the use of CPF savings, announced in Parliament yesterday by National Development Minister Mah Bow Tan, may not have the most far-reaching impact on the property market, but it is certainly going to be one of the more controversial.
Explaining the rationale for the new ruling, Mr Mah said that it was a move 'to align the treatment of private residential properties with HDB flats'. CPF savings were already available for joint-single purchases of HDB flats.
However, while there was not much debate on joint-singles buying HDB flats (presumably because of the 35-year age limit applied to their purchase), there was a quick and immediate response during the parliamentary debate raised on the new CPF ruling on private property, which does not come with any age restrictions.
In a cryptically phrased question, Ho Geok Choo (West Coast GRC) asked if making CPF savings available to non-related singles for buying private property would 'promote homogenous gender or heterogenous gender' partnerships. Raising the spectre of social mores, she also questioned if the new CPF ruling went against the Government's 'pro-family policy'.
This was side-stepped by the MND minister, but others, like National University of Singapore Environmental Management Programme director (School of Design and Environment) Dr Malone-Lee Lai Choo, are unequivocal. 'If people want to live together, they don't need to buy their own property to do it,' she says.
Dr Malone-Lee welcomes the news, not because it encourages non-related singles, but rather because 'it would diversify the property market'.
Chesterton associate director Colin Tan feels that young couples, who typically enter the property market through their first purchase of a HDB flat, will definitely appreciate the wider choice of housing options that the CPF ruling now opens to them. He also points out that HDB does not require couples to produce marriage certificates when registering for a flat and believes the new CPF ruling may similarly help couples to lock in property prices while these are still low, and worry about getting married later.
'Young couples would generally prefer to buy private property,' he said.
Still, when asked, two out three property experts believed that those most likely to take advantage of this new CPF ruling would come from the gay community. Already, Knight Frank executive director Peter Ow says that a significant number of one and two-unit apartments goes to the pink dollar. 'This new rule will make it even easier for such couples to buy property,' he said.
There will certainly be champagne corks popping in some circles. Fridae.com chief operating officer Dr Stuart Koe, the only organisation that tracks consumer spending of the gay community, says he knows of many gay couples who want to buy private property through joint incomes and CPF but have so far been restricted.
According to Fridae's research figures, 22 per cent or 100 out of a sample group of 500 gay people own their property, with 50 per cent earning over $80,000 annually. Dr Koe believes this clearly puts this segment of society up with other potential property owners and he expects more property developers to court the pink dollar. SC Global has already advertised on Fridae's website.