2 days ago, a PAP minister was quoted as saying in parliament that the housing market is better in Singapore compared to elsewhere. He cited the example of how only a select proportion of applicants in Hong Kong would eventually get subsidised housing, while people in London would queue in sub-zero weather to get a one-bedroom flat for £400,000.
I went to do some brief research on the London property market and found out the reality for the average man was quite in contrast to that one example. In that specific article, the high prices were due to the location being Stratford’s Olympic Park, with one person being quoted as saying that he wanted to make the purchase for investment purposes. In a local context, surely not everyone can afford to stay in Orchard Road!
For a more realistic measure, I saw some recent advertisements from www.greatmove.co.uk where a semi-detached house went for £285,000 in Greater London while terraced houses could be had for £130,000. Given the average London income of £26,000, Londoners surely have it better than Singaporeans who have to pay anywhere from $184,000 to $232,000 for a new 3-room suburban BTO flat in Punggol (Punggol Bayview).
Taking an average price of $205,000 (and another conservative $15,000 for furniture and renovations), this means that a newlywed couple would need to fork out $837 a month for mortgage instalments over 25 years with another $434 for the renovations over 3 years. How would an average poly couple earning a combined gross income of $4,500 feel about such a huge outlay?
Plainly, the increases in HDB prices was due to a supply-demand mismatch arising from large scale immigration: HDBs shot up by 100% over the 6 years preceding the financial crisis. If you compare the average income vs. housing prices of Singaporeans from 1990 to 2009, median income doubled while housing prices quadrupled! Because the rich own more than one home, this surely enriches them at the expense of young future generation homebuyers while stressing the poor.
Time to embrace a more sustainable model such as that proposed by the Singapore Democratic Party?