Blog
Summary : REALITY CHECK ON HOUSING DREAMS
BY: JANICE LIM
PUBLICATION: BT 11/02/2023
PAGE: 9
NO. OF WORDS: 2101
The article discusses the perceived affordability of public housing in Singapore, highlighting a gap between data and the sentiment on the ground. Key points include:
- Government Data: According to government data, public housing in Singapore is deemed affordable based on metrics such as the mortgage servicing ratio (MSR) and price-to-income ratios. The MSR is capped at 30% for Housing and Development Board (HDB) properties.
- Affordability Metrics: The price-to-income ratio is used as a metric, and a ratio of five is typically cited as the threshold for affordability. In 2021, the median price of a four-room resale flat was S$470,000, with a median monthly income for those aged 25 to 29 at S$4,095.
- Perception Gap: Despite the affordability metrics, there is a perceived gap between data and the reality on the ground. Some young homebuyers feel the market is challenging, and the high prices, even if considered affordable, contribute to their unease.
- Market Trends: Resale prices have risen, with a 22.4% increase over the past two years. The resale price index is now 15.1% higher than the previous peak almost 10 years ago.
- Challenges for Homebuyers: Young couples face challenges in the housing market, with some having to settle for older resale flats or make trade-offs on size, location, or age. The resale market has become competitive, leading to frustration for potential buyers.
- Long-Term Commitment: Concerns are raised about the length of mortgage loans, with some buyers expressing anxiety about paying off a 25-year housing mortgage. Comparisons are made with previous generations that had shorter loan durations.
- Perception of Unaffordability: The perception of unaffordability is influenced by factors such as high quantum prices, media coverage of million-dollar HDB resale flats, and the overall cost of housing compared to historical highs.
- Suggestions for Improvement: Property agents and experts suggest more balanced media coverage, granular data that considers different flat types and locations, and factoring in long-term interest costs for a more accurate picture of affordability.
- Government Response: Prime Minister Lee Hsien Loong acknowledged concerns about housing affordability and BTO waiting times. The government is working on addressing these issues to ensure that Singaporeans have an affordable home.
The article emphasizes the need to consider both data and individual experiences when evaluating the affordability of public housing, acknowledging the challenges faced by young homebuyers in the current market.
Comments are closed.