Will private property be beyond young S’poreans’ reach?
The Singapore property market ‘became 2007’s hottest global market with prime capital values increasing by 50 per cent (in the first half) fuelled by astounding rental growth and yield compression’. So said Jones Lang LaSalle on July 20.
Despite this phenomenal appreciation of our property market and amidst signs of speculation, our Minister for National Development, Mah Bow Tan, was yesterday quoted as saying that the government would try to avoid interfering in the market.
Instead of urging a degree of caution as Minister Mentor Lee Kuan Yew did early last month, it would appear that by his comments our National Development Minister is stoking the roaring property market.
In February this year, the Department of Statistics released a paper, Key Household Income Trends 2006. In that paper, it was shown that the top 10 per cent of households in Singapore had an average household income of $174,330 per year or $14,528 per month.
Assuming that mortgage payments should be no more than 35 per cent of income, the top 10 per cent of Singapore households can only afford to borrow $833,000 based on a 19-year mortgage at an interest rate of 4 per cent.
If the top 10 per cent of our households can only afford to borrow $833,000, how does one come to terms with the current roaring property market where private properties are now transacting at multiples of millions of dollars and where even selective HDB flats are going at more than $700,000?
At the rate that private property prices are increasing or just based on today’s prices, would our young Singaporeans ever have a chance to own private properties? Or, should we agree with what Mr Mah said, ‘I’m not talking about the multimillion-dollar apartments in the central area. I think those people can take care of themselves.’
Unfortunately, multimillion-dollar apartments and landed properties are no longer confined to the central area.
Adrian Ho Kim Lee
Source : Business Times - 1 Aug 2007
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.