AT HIS National Day Rally 2023 speech, Prime Minister Lee Hsien Loong reiterated that Singapore will soon become a “super-aged” society.

In 2022, the proportion of Singapore citizens aged 65 and above was 18.4 per cent. By 2030, close to one in four citizens (23.8 per cent) will be aged 65 and above. The United Nations defines a country as super-aged if its share of population aged 65 and above reaches 21 per cent. Given the fast-changing demographic landscape in Singapore, how can the real estate market meet the needs of seniors? Is the senior-living market ready and ripe for take-off?

Meeting the needs of an aged society

Our government has been looking at ageing issues from as early as 1982. In February 2023, an update to Singapore’s Action Plan for Successful Ageing is set to increase the capacity of home and daycare services islandwide. More assisted-living facilities will be built and a wider range of senior-living retrofitting will be rolled out at homes islandwide.

The goal is to create senior-friendly living environments to enable seniors to age in place. As health needs arise with age, active healthcare arrangements are also often required.

Our current landscape provides seniors with four main care options.

According to a 2022 report published by National University of Singapore’s Saw Swee Hock School of Public Health, 97 per cent of seniors were ageing in place at home as at 2021, relying on care from either family members or foreign domestic workers while maintaining a level of independence.

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Some seniors, albeit a minority, chose migration, while others opted for nursing homes, particularly if dedicated care is required. However, nursing homes in Singapore face strong demand and high occupancy, with many having a long wait list. Consequently, there is a gap where there are seniors who are cognitively able and well enough to live in the community, but might still require a certain level of medical and healthcare services.

This leaves us with the fourth option to bridge the gap – the assisted-living segment. Assisted living provides a range of facilities, programmes and medical services to cater to independent seniors who wish to retain autonomy over how they live.

In fact, the gap in supply for assisted-living products has resulted in the extended pre-institutionalisation of seniors into nursing homes. Anecdotally, Singaporeans have also explored nursing homes across the border in Johor Bahru due to their proximity and affordability, indicating the lengths we are willing to go to access suitable care options.

Public and private senior-living product offerings in Singapore

Recognising the need to provide options across the spectrum, our government has adopted a multi-pronged housing strategy for seniors.

Public housing estates have senior-friendly infrastructure, rightsizing is encouraged, and lease monetisation options are available.

Public assisted-living housing, including Community Care Apartments (CCAs), were incorporated into new Build-To-Order projects, such as Harmony Village @ Bukit Batok that was launched in February 2021 and Queensway Canopy launched in November 2022.

There were also two Integrated Care Communities at Kampung Admiralty and Integrated Dementia (Home-based) Assisted Living (IDeAL @ 115), providing senior-friendly facilities and amenities close to their residences. Another project, The Heart of Yew Tee Integrated Development, will be completed by 2027.

In the private sector, assisted-living options include St Bernadette Lifestyle Village at Adam Road, Bukit Timah and Sembawang, where private residential houses are retrofitted for senior co-living. Each of the three villages can house about eight to 12 seniors.

Nursing homes, such as Jade Circle by Lien Foundation, Lentor Residence, Apex Harmony Lodge and Allium Care Suites, have also incorporated assisted-living units.

More recently in June this year, the award of a Parry Avenue site to Perennial Holdings’ Pre 20 for a private assisted-living development represents a substantial stride forward in Singapore’s private senior-living market.

The Parry Avenue project will cater to healthy residents, those with mild dementia, and seniors requiring assisted daily living and nursing needs. The development, consisting of one and two-bedroom units, will have a dedicated dementia-friendly zone, a geriatric care centre and a hydrotherapy pool, as well as medical services and food catering.

Sizeable and untapped market

Undoubtedly, Singapore has a sizeable affluent market for private senior living that is yet to be penetrated.

Many seniors are still drawing high incomes well into their fifties. According to the latest available 2017/2018 Household Expenditure Survey (HES), 23.4 per cent of resident households with the main income earner aged 55 to 59 have a monthly household income of S$15,000 or more, which is not too dissimilar from the 25.1 per cent proportion for all resident households of all ages.

It is estimated from the HES that there are about 158,000 residents aged 55 and above with a household income of S$15,000 or above. Separate data showed that in 2022, about 223,000 residents aged 55 and above are reported to be living in private properties.

Many seniors have benefited from the strong growth in property prices in earlier decades, and can readily unlock retirement capital from their current homes. As such, there is a strong untapped market for senior-living products, which, we believe, with the right positioning and components, are likely to appeal to affluent seniors.

Developers face challenges that require dedication and creativity

Ageing in place requires a sufficient retirement nest and extensive care support.

Depending on circumstances, some seniors may consider public housing, rightsizing their private property or a private senior-living product for retirement.

In ensuring inter-generational interactions within the community, our government has planned well in redeveloping old areas and launching new projects in old towns.

Nonetheless, developers venturing into the senior-living market face uncharted prospects with a unique set of opportunities and considerations.

For one thing, there is a need to balance the high cost of both land and healthcare services with the call to price the end products and services at an affordable level. With limited land zoning typologies, it is challenging to acquire land for senior living if competitors are not likewise restricting their target markets to seniors.

What’s more, it could be a tall order for developers to offer an attractive quality-cost trade-off for a private product, relative to the quality and low-cost publicly built CCAs which are supported by an abundance of amenities and infrastructure.

Cultural barriers and stigmas could also limit market development. Family values such as filial piety and a lack of awareness of assisted-living products have undoubtedly contributed to the prevalence of ageing in place at home.

Another consideration relates to the perceived silos of senior-living communities, particularly if they are gated. The exclusivity seemingly robs residents of much-needed connection with the wider community. Public senior-living options are comparably more porous and integrated.

Possible catalysts

The obvious catalyst to level the playing field for senior-living development is to offer new or restricted typologies for senior living. Such typologies could include land zoned for senior living or for residential with senior-living parameters.

Concept and price tenders could be held to better ensure that developments are run by players with strong track records in development and healthcare.

Developers could also be encouraged to submit proposals on existing land parcels by dangling carrots for bonus gross floor area incentive schemes, for instance.

Public-private partnerships may also be considered. A private developer partnering public healthcare and social service providers could conceivably offer a quality product at an attractive price point.

There is no easy solution to speed up cultural acceptance. But the completion of the upcoming CCAs and the Parry Avenue assisted-living development should hopefully offer a glimpse of new possibilities. Where market awareness is limited, it could be a case of supply creating demand over time. Financial incentives could include grants or dollar-matching initiatives by the government for such products.

Paving the way for inclusive housing for our seniors

Most seniors desire a sense of normalcy, purpose and independence. The spectrum of needs spans different lifestyles and living preferences of seniors with varied financial and cultural backgrounds.

The government has made great headway in the public arena with the low-cost CCAs.

On the private front, more developers are recognising the opportunities in the senior-living market.

With the appropriate catalysts, developers and operators will be more aligned with the public sector goals in co-creating the ideal built environment for ageing, while ensuring such models are also financially viable, for our seniors to age with dignity.

Lam Chern Woon is head and Lynnette Yeo is senior analyst, research and consulting, at Edmund Tie & Company (SEA)