http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_419981.html
Homes more affordable
Relatively cheaper than in 1996 boom year, data from two reports say
By Joyce Teo, Property Correspondent
Shoes left outside the Caspian condo showroom in Jurong West by potential buyers testify to the demand for private homes despite the downturn. Thanks to the boom years, wage growth has outpaced property price growth for many, making private homes more affordable. -- ST FILE PHOTO
PRIVATE home prices may be on the rise again but new data suggest home buyers swept up in the latest frenzy are not necessarily overstretching themselves.
Buyers are finding condominiums far more affordable relative to their income now than they did during the mass market property boom of 1996, thanks to strong wealth creation in recent years.
This is the conclusion of separate new figures from financial giant Citigroup and property consultancy Jones Lang LaSalle.
Citigroup economist Kit Wei Zheng said: 'Today, the average condominium is probably selling for around 19 times the annual income of the average Singaporean. While this is by no means cheap, it is still significantly lower than the peak of over 40 times in 1996, and around 24 times in 2007, though obviously higher than the lows of around 15 times from 2003-2006.'
Mr Kit's study looked at absolute prices rather than the price per square foot.
His measure of affordability does not take account of a couple of factors boosting affordability in the current market.
First, the average condo buyer earns a higher-than-average wage, and is likely to have enjoyed faster wages growth.
Second, interest rates are far lower now than in 1996 and 2007. Analysts say this is helping to fuel demand.
Also, Mr Kit's study uses average income, which could be significantly higher than the median - or midpoint - given the widening gap between rich and poor.
As well, he uses the average selling price of condos, which also could be higher than the median as the former is pulled up by the sale of expensive prime units, especially in recent years.
[email protected]
Homes more affordable
Relatively cheaper than in 1996 boom year, data from two reports say
By Joyce Teo, Property Correspondent
Shoes left outside the Caspian condo showroom in Jurong West by potential buyers testify to the demand for private homes despite the downturn. Thanks to the boom years, wage growth has outpaced property price growth for many, making private homes more affordable. -- ST FILE PHOTO
PRIVATE home prices may be on the rise again but new data suggest home buyers swept up in the latest frenzy are not necessarily overstretching themselves.
Buyers are finding condominiums far more affordable relative to their income now than they did during the mass market property boom of 1996, thanks to strong wealth creation in recent years.
This is the conclusion of separate new figures from financial giant Citigroup and property consultancy Jones Lang LaSalle.
Citigroup economist Kit Wei Zheng said: 'Today, the average condominium is probably selling for around 19 times the annual income of the average Singaporean. While this is by no means cheap, it is still significantly lower than the peak of over 40 times in 1996, and around 24 times in 2007, though obviously higher than the lows of around 15 times from 2003-2006.'
Mr Kit's study looked at absolute prices rather than the price per square foot.
His measure of affordability does not take account of a couple of factors boosting affordability in the current market.
First, the average condo buyer earns a higher-than-average wage, and is likely to have enjoyed faster wages growth.
Second, interest rates are far lower now than in 1996 and 2007. Analysts say this is helping to fuel demand.
Also, Mr Kit's study uses average income, which could be significantly higher than the median - or midpoint - given the widening gap between rich and poor.
As well, he uses the average selling price of condos, which also could be higher than the median as the former is pulled up by the sale of expensive prime units, especially in recent years.
[email protected]
