You conduct your relationships and the first few years of your marriage within earshot of your parents?

This seems cultural, and before the invention of privacy this was the norm.

EDIT: I thought that was a meme and it's not—i'm referring to the growth of the middle class and multi-room houses.

That's how the rest of the world does it, so, yes? Also note that pre-marital relationships are often not very common.

The alternative is a market based housing market such as another city state has: Hong Kong.

I think everyone in Hong Kong would happily live with their parents for 5 years if it means they can buy their own flat afterwards.