Largely gone for a decade is the average upper middle class, from housewives to hawkers, dabbling in real estate for an almost instant profit.

While this streak created many millionaires, it also caused a lot of bankrupts. The market peaked in 1996 and then fell - hard.

Today, the scar is still visible. Drive around some estates and you will still see many “For Sale” signs. Values were down 35% since the peak before stabilising last year.

But unlike others, the Singaporean’s passion for real estate was never doused.

The 3.4 million people, born and raised in one of the densest countries on earth, have developed a special feeling for property not many people in the larger world outside can understand.

This emotion has turned Singapore into the biggest home-owning country in the world on a per capita basis, with 95% of the people being owners.

Some thousands have bought land or property in foreign countries, including Malaysia, Australia, China and Britain.

The IT revolution, however, has contributed to a decline in property demand worldwide and Singapore is no exception.

The speculation may have gone but their interest in upgrading or downsizing, according to economic circumstances, remains strong. The proportion of citizens buying property every year is still one of the strongest in the world on a per capita basis.

Over the last 10 years, more than half (or 52.2%) of Singapore’s total households have changed residence, according to figures released this week.

The report says about 62% had moved to bigger homes, while 18.4% shifted to smaller places.

The statistics showed that younger households and higher-income households have higher propensity to change, moving to bigger houses. Although the report doesn’t say it, it is believed that much of the downgrading took place in recent years as the woes of unemployment took effect.

Another bad news is that housing indebtedness, already high, has risen further as a result of upgrading. Some 77% of movers have outstanding loans of S$50,000 to S$150,000 (RM110,000-RM330,000).

But despite a widening gap between rich and poor in Singapore, the report – coming amid preparations for the general election – contains good news for the poorer class.

Collectively, they have benefited most from better housing. The lowest 20% of income earners (S$900 or around RM2000 a month or less) make up almost two-third (63%) of up-graders.

The upgrading could also have been encouraged by the decline in property prices over the past 10 years, easier financing and lower interest rates.

Confronting the government, Singapore’s biggest landlord, which owns three quarter of real estate here, is a set of new realities.

Tiny Singapore has become one of Asia’s wealthiest countries and keeping property affordable for the middle class is a struggle.

Buying a property is a 30-year financial commitment here. This means that people will buy – or upgrade – only if they feel confident they are able to pay off the loan for a long period, which in turn depends on the jobs outlook.

The New Economy has rendered employment less stable for many middle-class citizens everywhere.

People are practical during such times. The poor sentiment is reflected by a greater demand for smaller three-room flats over larger more expensive ones.

This has forced the HDB to begin converting some five-room blocks, which suffer from a lack of buyers, into more popular smaller two-room ones.

The other dilemma is managing higher expectation of the new generation. It is less interested in HDB flats, despite their big design improvements; they want private condos and want them cheap.

Many citizens who seek to migrate cite cheaper, better property as a reason for doing so. This is forcing the government to plan for a future of six to seven million people in which private condos form as much as a third of all properties here.

This will mean increasing the number of private homes four-fold to 460,000 by around 2010. By then, private homes will make up 25% to 30% of all housing units, compared with the present 10%.

This is important for another reason, making itself attractive to foreign talent to prevent the country from falling into a long Japan-like stagnation.

o Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com

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