EFFORTS towards improving home ownership has seen ongoing discussions between Attorney-General, Aiyaz Sayed-Khaiyum and the Fiji National Provident Fund on possibly allowing those as young as 25-years to withdraw up to 60 percent of their savings for the purchase of property.
Speaking at an FNPF-organized pension workshop this week, the AG drew on Singapore’s exemplary home ownership rate, which is currently pegged at 92.2 percent.
With nearly 70 percent of Fiji’s population aged below 40, he said it was key to ensure a sustainable superannuation fund that would allow contributors would justly get their pension.
“The housing development board in Singapore, which is very heavily subsidized, their superannuation fund allows members to withdraw in excess of 60 percent of their total savings to contribute to the purchase of their first home,” he noted.
“This is why Singapore today has one of the highest rate of home ownership. But with housing also, there’s also a trick, and we’ve had – for example- what we call “low cost housing” now the politically correct term is “affordable housing” in places like Raiwaqa and Nabua.
“Those people have spent about two generations in those very modest accommodation, but the reality is whenever we want to increase home ownership, we must ensure that by the person owning their first home, they must be given the opportunity to have social mobility.
If a person buys a low-cost housing home, they must be able to – in a few years’ time- be able to buy a bigger house,”.
He said if real estate prices in such areas remained stagnant or depreciates, then their ability to have social mobility would be very limited.
“Singapore again has been able to do that quite well; in their housing estate of apartment block, they will have relatively expensive apartments, middle-range apartments, affordable apartments sometimes on the same or different floors but all in close proximity.
“So the idea therefore is that real estate continues to appreciate and in Fiji, unfortunately, that has not really worked. That is some of the areas we are targeting in the next few years and hopefully with a collaboration with the FNPF and we’ve also reached out to the World Bank and expect to be able to get that level of expertise.”
Fiji’s home ownership rate is yet to reach the mid-way mark, according to earlier comments by the AG.
Property ownership also ranks low in Property.com.fj’s Fiji Real Estate Survey 2016, where only 29 percent of 301 respondents said they owned property. Twenty-two percent said they owned property with a bank mortgage. A 41 percent majority reside in rental properties by themselves or with people they know, while 37 percent live in their own home, followed by 15 percent who stay with their parents.
Five percent reside in temporary accommodation (work accommodation, housesitting, caravan park), while two percent indicated residency in a shared household, including people they previously did not know, but where they contribute to the rent.