In a letter published in the Straits Times forum on 31 August 2009, HDB Deputy Director Mr Ignatius Lourdesamy wrote that HDB flats remain affordable to eligible first-time households as they use between 21 to 25 per cent of their monthly income to service their loans on new and resale HDB flats which are well below the international affordability benchmark of 30 per cent.
Though he did not state it explicitly, he is likely to be referring to the average shelter-cost-to-income ratio (STIR) or the proportion of total before-tax household income spent on shelter. The shelter-cost-to-income ratio is calculated for each household individually by dividing its total annual shelter cost by its total annual income. A STIR higher than 30 per cent is conventionally taken as indicating a serious housing affordability.
As I was unable to obtain any international studies published online using the STIR to assess housing affordability in different countries including Singapore, I have to use the Median Multiple, which correlates closely to the STIR. It is used by the “Demographia International Housing Affordability Survey” whose extremely detailed and comprehensive report is available online in pdf format. (read report here)
The 5th annual Demographia International Housing Affordability Survey covers urban housing markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. It is unique in providing standardized comparisons of housing affordability between international housing markets. (Note: the study does not include Singapore and the median house prices use are that of private, and not public housing)
The Demographia International Housing Affordability Survey uses the “Median Multiple” (median house price divided by median annual household income) to assess housing affordability. The Median Multiple is widely used for evaluating urban markets, for example being recommended by the World Bank and the United Nation. It is an easily understood indicator of the structural health of residential markets and facilitates meaningful housing affordability comparisons.
Read rest of article here:
http://temasekreview.com/?p=12685
Though he did not state it explicitly, he is likely to be referring to the average shelter-cost-to-income ratio (STIR) or the proportion of total before-tax household income spent on shelter. The shelter-cost-to-income ratio is calculated for each household individually by dividing its total annual shelter cost by its total annual income. A STIR higher than 30 per cent is conventionally taken as indicating a serious housing affordability.
As I was unable to obtain any international studies published online using the STIR to assess housing affordability in different countries including Singapore, I have to use the Median Multiple, which correlates closely to the STIR. It is used by the “Demographia International Housing Affordability Survey” whose extremely detailed and comprehensive report is available online in pdf format. (read report here)
The 5th annual Demographia International Housing Affordability Survey covers urban housing markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. It is unique in providing standardized comparisons of housing affordability between international housing markets. (Note: the study does not include Singapore and the median house prices use are that of private, and not public housing)
The Demographia International Housing Affordability Survey uses the “Median Multiple” (median house price divided by median annual household income) to assess housing affordability. The Median Multiple is widely used for evaluating urban markets, for example being recommended by the World Bank and the United Nation. It is an easily understood indicator of the structural health of residential markets and facilitates meaningful housing affordability comparisons.
Read rest of article here:
http://temasekreview.com/?p=12685
