They say that old is gold, and in Singapore’s case, a rapidly aging population could mean lucrative opportunities for private property developers.
One in eight Singaporeans were senior citizens above the age of 65 in 2015, and this proportion is expected to double to one in four, or to over 900,000 by 2030. That’s enough to fill up nine Toa Payoh towns today.
The combination of an aging population and growing retirement income means that more housing products for senior citizens will be necessary, and private residential developments catering specifically to seniors may be something that Singapore will need in the near future, Edmund Tie & Company (ET&Co) said in a recent report.
"An ageing but affluent Singapore population offers opportunities for the private sector, especially if they can look at ways to monetise the equity locked in their housing asset," ET&Co said in its “Senior housing in the private sector: What shape and form?” report.
However, senior residents of private residential properties have fewer options when it comes to extracting housing equity, the firm explained. Unlike public housing dwellers, those who reside in private properties do not have options such as Lease Buyback Scheme, Silver Housing Bonus Scheme and HDB Flexi Flats, which allow homeowners to right-size or to sell back part of their flat’s lease to HDB.
Seniors living in private properties who wish to age in place must hence, recognise the need to liquidate their property assets to finance their future living arrangements, ET&Co said.
Age-restricted communities
In its report, ET&Co suggested opportunities for the private sector such as providing age-restricted communities where only senior citizens are allowed permanent residence and villages with homes of different prices but approximate to recreational areas.
However, land scarcity and the high cost of land in Singapore may hinder the development of such communities. A more suitable location to build such a facility could be across the Causeway in Iskandar Malaysia in Johor, where healthcare facilities are being developed, such as the upcoming Thomson Iskandar medical hub.
Locations in Iskandar Malaysia, such as the upcoming Thomson Iskandar medical hub could be a suitable location to build an age-restricted community, ET&Co said.
Another factor is that such private age-restricted projects in Singapore are also likely to be less accessible to middle and lower-income individuals. "If Singapore were to build such active adult communities vertically, it would only be affordable to individuals who are in the middle-upper income bracket. The buyers are likely to come from retiring private-home owners," the report said.
There could also be a lack of developer interest due to social stigma associated with elder housing solutions. The firm said: “While elderly friendly features will command higher demand over time, it may take more time for buyers to change their mindsets and view them as value-added features.”
Co-living spaces for retirees
"Retiring individuals have to conduct their financial planning ahead so that they can maintain their quality of life when they retire," ET&Co said. However, the need to employ helpers may arise and this could throw them off their financial track. In addition, the proportion of one-person households that are above 65 is likely to rise.
According to the report, such solo elderly households are more prevalent because of changing family structures, while others simply desire more personal space and independence.
One possible solution is to create co-living spaces for retiring singles.
The concept evolved from dormitories, and started when aspiring entrepreneurs and students stayed in the same mansion, sharing the facilities.
Put in this context, retired residents in these co-living spaces can tap into amenities such as free internet and maid services, while making new friends and creating new social experiences. Such living arrangements also serve to make the cost of accommodation more affordable as they are shared among cohabitants.
While moving to neighbouring countries in active adult communities may be an option in the future, most retirees will still prefer to stay in Singapore. With the Internet of Things and the shift toward a shared economy, we will likely see more shared services in co-living arrangements to facilitate the needs of the elderly, the report concluded.