7 Real Estate Lessons India Can Learn From Singapore
Former Singaporean diplomat Kishore Mahbubani remembers being put on a special feeding programme in first grade, in the 1950s. Malnutrition was very common in his country at that time. Even in 1965, when Singapore ceased being a part of Malaysia, the city-state's per capita income was the same of that of Ghana: US $ 500. But, if success is measured by how far you have progressed in the shortest possible time, Singapore is the most successful country in the world. Today, Singapore's per capita income is US $55,000 - this is among the highest in the world. In World Bank's 2016 Ease of Doing Business Index released recently, Singapore was ranked 1 among 189 countries. India and Singapore were almost on the same level of economic development 50 years ago.
Let us look at the real estate lessons India can learn from Singapore:
Singapore is a city
Singapore has been ruled by the People's Action Party (PAP) from the beginning of the country's history. However, contrary to popular perception, Singapore is a democracy, where other political parties also take part in elections. PAP has been the ruling the city-state, as other parties have not been unable to win any elections. This is because Singapore is a city. American cities of comparable size like San Francisco and Chicago were ruled by a single party for a longer time. How is this a real estate lesson? If Singapore were a large, diverse country, this would have been difficult. Cities are more able to implement better policies because most policies, especially real estate policies, are difficult to formulate without localised information. In cities, political constraints are lower, too. India's performance would improve if urban local authorities are given more autonomy.
Singapore turned liabilities into assets
Singapore, like Mumbai, is a city built around a large bay. So, there is less land available for the city to grow. But, unlike Mumbai, Singapore built bridges to increase the supply of urban land. According to a Bloomberg study, Singapore has the most affordable housing in the world.
Singapore's has a world-class infrastructure
Singapore's airports resemble movie sets. The country's transportation networks and utilities are also excellent. One of the major reasons why the government was able to invest in infrastructure is superior fiscal policy. Singapore's government does not spend more than it earns in taxes. The People's Action Party is headed by economically informed leaders. George Mason University professor Alex Tabarrok says that “Planning for infrastructure” is the most important lesson Indian cities like Gurgaon can learn from Singapore.
In Singapore, buildings are taller
In Singapore's central business district, the floor space index (the ratio of floor area to the size of the plot) is 25. This is exceptionally high, even by global standards. The FSI in much of South Mumbai is 1.33. As a result, relative to income, prime residential real estate in Mumbai costs nearly 7.5 times that of its cost in Singapore.
Freedom allows Singapore's real estate developers to innovate
Three years ago, KOP Properties, a real estate developer, decided to build luxury apartments that allow residents to park their cars next to their living room, even if they live on the 30th floor, by building a sky garage. The reason why real estate developers in Singapore are able to innovate is that it is a prosperous nation, where building restrictions are among the least stringent. In dealing with construction permits and in enforcing contracts, Singapore is on the top of the list.
Singapore's housing policy has improved life expectancy
Singapore's achievements in health are considered a result of spending on medical care. However, Singapore spends less than one tenth of the fraction of their GDP the US spend on health care. Yet, infant mortality in United States is thrice of that of Singapore. Better living standards, especially in sanitation and water supply, have also led to greater life expectancy and lower infant mortality in Singapore. Singapore is one of the greenest and least-polluted countries on earth. A high FSI has led to development of more open spaces, and has lowered pollution.
Singapore charges vehicles for driving
Singapore and Hong Kong have more expensive vehicles per capita than other countries. Singapore is also the second-densest country on earth. The country has far less land when compared to others. An open immigration policy also allows more people settling in here. Yet, its roads are congestion-free, because the country charges people for driving on roads using modern technology.