‘What property? We’re already struggling to find jobs’: Singapore Gen Z debates investing

SINGAPORE: With the cost of living rising and the prospect of owning a home in the city-state one day becoming increasingly out of reach, are younger Singaporeans really starting to turn away from property and towards the stock market to build their wealth?

Last Saturday (Aug 22), The New York Times published an article highlighting how Gen Z individuals are moving away from buying a house as a way to secure their financial future, and instead turning to investment apps and retirement accounts.

A Pew Research Center survey, publicised in June, found that 80% of adults under 40 believe it is harder for young people today to buy a home than it was for their parents' generation.

It also found that younger adults are no longer as convinced that property is a ‘good investment.’

Although the report focused on the US, it opened up a discussion among Singaporeans after a local user, cronies4life, shared the article on r/SingaporeFI, a subreddit centred on financial independence.

In the caption, the user asked whether Singaporean Gen Zs might actually be heading in the opposite direction.

“With the population expected to grow beyond 8 million, is property and not stocks the way for SG Gen Z?”

‘I strongly prefer stocks’

For some Gen Z Redditors, the answer appeared to be a resounding no.

One young Singaporean said they “strongly prefer stocks,” arguing that while property may be relatively stable, it is far less flexible as an investment.

“Property is stable, but its growth is sluggish with gahmen regulation, and is highly illiquid. You can’t buy and sell quickly if you need the money quickly.”

That did not mean they had completely abandoned the idea of owning a home, however.

“I still plan to buy a house regardless, as it is one of the things I desire in life.”

Another Redditor listed the many costs and inconveniences that come with owning property.

They wrote, “Property can get older = needs more maintenance, loan interest, yearly property tax, refresh the house. Buy-sell need to pay taxes, needs tons of paperwork, is a long process, involves spending time and the headache of viewing property, buy-sell renovations, moving fees….”

In comparison, they said, “Stocks are profit tax-free, have no paperwork in buying and selling, no yearly expenses, no maintenance fee, no viewing, no renovation…. Buy partial small unit, sell small unit, can do online anytime anywhere, no need physical signing paperwork. No need to go to the bank to view loan rate.”

A third Redditor explained that while stocks are undoubtedly more volatile, they can be the more efficient way to build wealth over the long term.

“Stocks are more volatile, but as long as you’ve got discipline, mathematically it’s actually the most optimal way to make money in the long run, and what Gen Z have is time. Buy and hold, and don’t ever sell during a downturn.”

A fourth wrote, “What property? We're already struggling enough to find jobs.”

A fifth added, “It’s just the ease and barriers of entry. Buying stock now is as easy as shopping on Amazon. The same can't be said for properties.”

‘Housing will be a large part of the average Singaporean's wealth’

Still, not everyone in the discussion was ready to write off property as an investment.

One user argued that the answer ultimately comes down to the basic principles of “demand and supply.”

Another questioned whether Singapore's population is actually expected to surpass eight million anytime soon, while pointing out that Singapore's unusually high rate of home ownership makes the local situation quite different from that of the US.

“Singapore has very high home ownership. And with BTO pricing below market resale price, at some stage of life, housing will be a large part of the average Singaporean's wealth.”

Meanwhile, a third Redditor pointed out that the article was not particularly relevant to Singapore. 

“Your article is about the US. Where Gen Z and some millennials are struggling to own their first home. No connection to Singapore.”/TISG

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