Should Singaporeans be grateful for property cooling measures?
February 25, 2017
Singapore’s Second Minister for Finance Lawrence Wong said in a Bloomberg TV interview that the government hasn’t “made any movement in the budget” to relax the property cooling measures because “demand remains very resilient” and “property volume in terms of transactions have increased and not decreased”.
Sacrificing housing affordability for foreign investment
Singapore private property prices have fallen only 3 percent in 2016 and a total of 11.2 percent from the last peak in the third quarter of 2013, after a surge of 92 percent since the bottom of 2003.
But compared with our counterpart in Hong Kong, home prices there have risen more than 150 percent since 2009 and 370 percent from the SARS period in 2003.
According to a recent study by Oxford Economics, Hong Kong has the most unaffordable housing in the world, followed by Mumbai, Beijing, Shanghai and London. Singapore takes the 7th place after Tokyo.
With strict criteria and a long waiting time of over 8 years for public housing, Hong Kong people are forced to go after private properties.
However, only people have a monthly income of at least HK$40,000 to HK$50,000 (S$7,000 to S$9,000) can afford to buy a private home. A median income family needs 35 years of annual income (and without spending any of the income) to buy a 970 sq ft property. The duration is 30 years for Mumbai, Beijing and Shanghai.
Chinese buyers have long been blamed for pushing up property prices in Hong Kong. CNBC recently comes up with an article on “Hong Kong and Singapore property: One is winning on Chinese investors” (CNBC, Feb 17)
Obviously, investors from China are more interested in Hong Kong than Singapore properties... read more