Episode summary
How Singapore and Australia Took Opposite Paths on Housing
Wall Street Week
· · Guests: Saul Eslake, Sumit Agarwal, Jordan Davies, Jeff Chie
Summary
The episode argues that policies meant to help first-time buyers often just shift the burden or push prices higher. The host frames the issue as “robbing Peter to pay Paul,” comparing proposals to let Americans tap retirement savings with Australia’s superannuation withdrawals and with Singapore’s housing system.
Australia is presented as a cautionary example. A guest says housing affordability there has deteriorated sharply, with house prices more than 13 times household disposable income and the median home above A$1 million. He argues that letting buyers raid retirement savings would mainly inflate prices, do little for typical first-time buyers who have little super saved, and weaken retirement security.
Singapore is presented as the opposite model: mandatory savings can be used for down payments and mortgage payments, but steep buyer taxes discourage second and third homes. A guest says that setup treats housing as a place to live, not mainly as an investment, while also making ownership more attainable for first-timers. The episode concludes that the hardest part of solving affordability may be political, because cheaper housing can hurt existing owners.
Key takeaways
- The host says policies that unlock extra capital for homebuying may just increase demand and leave prices higher.
- A guest says Australia’s median house price is a little over A$1 million and more than nine times average weekly earnings.
- The guest argues that letting Australians withdraw more superannuation would mainly add upward pressure to prices and reduce retirement income.
- In Singapore, a guest says mandatory savings can be used for housing, while a 30% additional buyer stamp duty discourages second homes.
- Jordan Davies says he bought in Melbourne as a place to live, not as a bet on rapid price gains.
Notable quotes
“This is a story about robbing Peter to pay Paul. When it comes to buying a first house, people around the world are looking for some way to pay uncomfortably high prices”
“-The ratio of house prices across Australia to household disposable income per person aged 15 and over is now over 13 times”
“My work showed, I think fairly clearly, that that scheme would have added upward pressure to housing prices, wouldn't have helped those in the traditional first-home buyer demographic”
“-In Singapore, there's something called an ABSD, or Additional Buyer Stamp Duty. What that means is that if you're buying a second house in Singapore, you have to pay an additional stamp or buyer stamp duty of 30%”
How the episode opens
Westin: This is a story about robbing Peter to pay Paul. When it comes to buying a first house, people around the world are looking for some way to pay uncomfortably high prices. Earlier this year, White House Economic Council Director Kevin Hassett suggested Americans might dip into their 401k retirement funds.
But this finding new ways to borrow really helped first-time homeowners or does it just drive prices even higher? We went to two countries with very different models to find out. Jordan Davies and Jeff Chie don't know each other.
They've never met, but they have one thing in common. Both just bought their very first house. Davies, a lawyer in Melbourne, Chie, a sales worker in Singapore, and they followed very different paths to achieve their goal.
-It's really hard when you see people who are doctors who worked so hard, studied for 10 years and are trying to think about, "Well, I don't have a home yet and I don't yet have a family" and putting off key decisions or key stages like having families because it's so unaffordable to get a home in Australia, in the big cities in Australia. -This is public housing from the HDB, our government. I bought it back in 2021 before it was built.
At the point of time where we purchased this flat, we don't have to come up with a huge upfront of cash or money. All we need to get is probably a 5% of the down payment to secure the unit. And then 5 years later, where we collect our key, that's where we pay the remaining lump sum of 15%, amounting to 20% down payment for us.
I would say it's not difficult to buy a first home in Singapore. Westin: But Singapore might be the outlier.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing affordability
- homeownership
- retirement savings
- down payment assistance
- property taxes
Watch the episode
Watch “How Singapore and Australia Took Opposite Paths on Housing” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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