By Dr Yuen Chung Kwong

Singapore has one of the highest per capita wealth index in the world, largely a reflection of high property prices and a high level of real estate ownership.

Yet, few people feel they are rich, because most people do not have large amounts of disposable cash – one might live in a high price home but might not derive income from it; in fact, the home might well tie up cash in loan repayments, property taxes and other expenditures.

Old retirees are specially liable to fall into such a situation – they might have most of their savings vested in their home, with little savings in other, income generating investments. Given their limited income, the outlays imposed by their owner-occupied properties could be a significant burden.

Why dont they move to cheaper homes, renting out their high value properties, or sell out and put the proceeds into alternative assets that generate income? Renting is often a difficult option, because a home occupied by an owner with inadequate income is often not kept up to the kind of condition that tenants would require, and home renovation can be very expensive.

Owners are also often reluctant to sell as they expect property values to rise, and they would miss out on the capital gains. In short, owning and hoping to benefit from property investment can in itself be a costly proposition.

With the new tax measures announced in the 2013 budget, increasing property tax collections on high end homes (while reducing it at the other end of the spectrum), the plight of such asset-rich, cash poor individuals can only increase.


Yuen Chung Kwong completed his PhD in Computer Science from Sydney University in 1972 and worked in Australia and Hongkong before joining NUS Computer Science Department in 1983; he was department head from 1985 to 1993 and retired in 2007.

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