Housing affordability in Singapore has been a hot topic. In an article published in The Business Times, Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group asks: is Singapore property prices unaffordable or are we paying premiums for quality housing?
It’s no secret property prices in Singapore are high. Over the course of the pandemic, we saw prices in both HDB and private property markets jump, sparking fresh debate over housing affordability concerns.on 5 June 2023, Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group provided a fresh perspective on the topic.
Currently, Singapore’s affordability ratio of median property price to median annual income is 13.7 for private property and 4.5 to 4.7 for public housing. This firmly places private homes in the “unaffordable” range. For context, theis about $10,099 and properties around $1.58 million will be considered unaffordable to the median household.
This can seem surprising if you consider Urban Land Institute statistics. If median income earners need to earn and save for more than 13.7 years to afford a private property, then it’s quite surprising that many of these buyers are so young.So how are these young buyers affording these high property prices?Three words: intergenerational wealth transfer. Basically, the baby boomers who are now aged 59 to 76 have been able to accumulate wealth over the years.
Meanwhile, the April 2023 cooling measures reaffirmed the Singapore government’s commitment towards prioritising housing for owner-occupation. It is a strong signal that they are trying to curb interest from local and foreign investors, as well as second-home buyers.Private housing is a little pricier, but again, they do not house the masses. But there are different implications when we discuss the affordability of private housing.
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