Still Better Than Hong Kong, Australia and New Zealand
There is not a tinge of surprise in the finding by Demographia International that Singapore housing is seriously unaffordable.
It ranked better than countries such as Australia, New Zealand and Hong Kong. That surprises me! Home ownership in Singapore stands at 88%, which is better than the other countries and which won praise from Demographia International.
Hong Kong was the worst of the markets tracked, coming in as severely unaffordable with a rating of 17.0 and the U.S. fared best with a median of just 3.6. New Zealand and Australia were rated severely unaffordable with a rating of 8.2 and 6.4 respectively.
Hong Kong and Singapore are just one-market countries whereas larger countries such as the U.S., the U.K., New Zealand and Australia with a number of States had more markets within each, so a median rate is applied against them. The UK stood at 4.7, marginally better than Singapore (5.0), and Canada came in with 4.3.
Institutional Failure: Demographia points out that the purpose of its Surveys is “to alert the public and policy-makers if housing exceeds 3.0 times annual household incomes, that there is institutional failure at the local level.”
Details on the 11th Annual Demographia International Housing Affordability Survey 2015 can be checked out at: https://sg.finance.yahoo.com/news/singapore-home-prices-seriously-unaffordable-better-other-countries-220015526–sector.html
The full report can be downloaded from: http://www.demographia.com/dhi.pdf
Singapore does deserve credit for being better in managing housing than many countries that are several times larger than it.
If countries that are least dense are pricier than Singapore that does point to a failure on the part of the governments there to keep housing affordable. Part of the reason could be land prices having been artificially propped up in major State capitals.
Still, being seriously unaffordable is not a happy scenario for Singapore to be proud of. What made Singapore housing so pricey?
Cooling measures alone cannot make housing affordable. It is a supply and demand issue in this tiny country. When there are more people here than the country should accommodate property prices will only go through the roof.
The country has to accept its size limitations and plan accordingly. Bringing in foreigners at will is the key reason and that needs to be addressed first. Building more high-rise apartments throughout Singapore will only compound the problem and make the country unlivable.
As the report concludes: “Urban policy should focus on the fundamentals — putting people first.”
G Joslin Vethakumar