If you were born between 1980 and 2000, you belong to the Millennial Generation. The youngest of you will be turning 16 this year while the oldest of you are around 35.
If you are unmarried, a lot of you are likely to be living with your parents. And by ‘a lot’, we mean a solid, almost-majority figure of 97%, according to a 2013 survey by the National Youth Council.
This makes sense – in Singapore, it is considered a cultural norm for children to move out only after getting married. We don’t have the ‘move out once you turn 18’ culture like the West. It is a norm to have three – even four – generations living under one roof.
However, did you know that many Millennial Singaporeans rely on AirBnBs to ‘escape’ from their families?
According to the article, AirBnb has 600,000 Singaporean customers (out of a 5.47 million population!), many of whom are young professionals who use the service to book accommodation to have a bit of privacy with their friends or lover.
Why would Singaporean Millennials rent? Why not buy property instead – you can get your privacy and an investment.
Let’s explore 5 reasons why Singaporean Millennials like to rent instead of buy property.
The most affordable option is not available to you
For most Singaporeans, public housing remains the most affordable housing option. Private housing is incredibly expensive.
Many of you already know this, but in case you don’t – it’s really hard to get public housing if you are not married and under 35 years old.
It doesn’t help that many Millennials are delaying marriage and/or parenthood, which directly delays their eligibility for public housing.
There are many reasons for this, but this rule alone prevent most Singaporean Millennials from buying property.
It doesn’t help that…
Other property options are way out of your budget
Singapore’s property market is very competitive. Every so often we hear news about some private housing being sold for record prices, raising the property benchmark again and again.
For Millennials, especially those who just started out, those prices are not only unrealistic – it’s straight up impossible to keep up with on your salaries.
Realistically speaking, the few of us who choose to move out from the family house can only afford to rent on our salaries. However, even if we don’t want to move out, there are…
Rental services which allow us to try many different properties, instantly
We are a generation that is used to instant gratification. We do like the idea of having our own place that is decorated to our preferences, but sadly that is a luxury limited to the few… or is it?
We imagine the Millennials’ train of thought goes something like this: why not try out beautiful rentals at private properties at affordable prices now instead of spending years saving up for an HDB down payment?
Yes, that’s what we are doing – by saving on rent money, our relatively healthy disposable income allows us to do just that.
In this Pinterest age, Millennials are exposed to so many different home decor options – from the industrial chic style to the minimalistic style to the modern eclectic style.
Trying out these rentals are experiences in their own right, which Millennials can enjoy before settling for one permanent home later in the future.
As for the reasons married Millennials prefer renting instead of buying…
Married millennials prefer living in condos
If you do happen to be married, you might be renting because you want to live in condominiums with extra facilities instead of an HDB flat.
This is not uncommon – about one in five young couples live in rented flats upon getting married, according to this survey. This is because image-conscious Millennials like the privacy, convenience (and glamour?) of living in such places.
Therefore, these married Millennials might be using a significant chunk of their salaries towards rent instead of saving up for down payment.
There are pros and cons for this route – Traditional advice says that money used towards rental ‘end up nowhere’.
However, we believe that renting can be the correct financial choice for the couple, depending on both their unique situation and the property market situation.
As long as the couple is living within their means, they shouldn’t be criticised for living in a luxurious properties.
Married millennials are waiting for build-to-order HDB flats
Another reason why married Millennials might be renting is simply because they are waiting for their Build-To-Order HDB flats to be ready.
They might or might not live in condos (see the previous reason), but in all likelihood, these couples might favour cheaper housing alternatives as they tend to be more budget-conscious and are saving aggressively towards their future.
In both cases, we know that privacy is very important for married Millennials. They would rather seek rental property rather than stay with their parents or in-laws.
These 5 reasons why Singaporean Millennials prefer to rent rather than buy properties might not apply to all Millennials.
After all, it’s hard to generalise all 1 million of you. However, we do note with interest the systems that were put in place which resulted in this outcome.
We are also impressed with how the free market (i.e AirBnB) reacted to fill this gap: by offering Millennials the properties they want, even if it is only for a very short-term basis.
At the end of the day, space will always come at a premium in Singapore. If Millennials are taking their time to make a decision towards this important purchase, then so be it.
More stories from The New Savvy: