What happened to the middle-class ?

[i_am_belle]

what happened to the middle-class ?

in today's ST, first we have 'homes more affordable due to strong wealth creation in recent years', and then ... we have 'more families seek help' ... ?!

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Homes more affordable

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.

Read the full story in Saturday's edition of The Straits Times.

[email protected]

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More families seek help

THE number of schoolchildren asking for help to pay for things like a daily meal during recess time has ballooned. In the first half of this year, 9,855 families have asked The Straits Times' School Pocket Money Fund (SPMF) for help - 1,000 more than for the whole of last year ..... etc.

 

[Porfirio Rubirosa]

Aug 22, 2009
HIGH HDB PRICES
Squeezed even harder

THE HDB resale price index has surged relentlessly since 2007. Since the first quarter of 2007, the index has increased 35.3 per cent and is now at a record high, even though the economy is still recovering from downturn.

This is an anomaly the Government should examine.

The recent Punggol Residences launch by HDB, which drew seven applications for every unit on sale, is another case to show the Government needs to increase supply to prevent housing prices escalating further.

While there is the additional housing grant to help the lower-income group, I urge the Government not to overlook the sandwich class group - those who are not eligible for subsidised public housing, yet cannot afford private housing. The escalation of mass market property prices has made the dream of owning a private property even more distant.

I urge the Government to reconsider the income ceiling of $8,000 as a criterion to be eligible for the Central Provident Fund (CPF) housing grant, which has been in place since 1994. Since 1994, the CPF Ordinary Account contribution rate has decreased from 30 per cent to 23 per cent and the HDB resale housing index has almost doubled from 75.5 to 140.2.

The supply of executive condominiums has also come to a halt. For those who aspire to condo living, Design, Build and Sell Scheme units launched by private developers range in prices from $550,000 to $720,000. Given the income ceiling of $8,000, couples who buy such flats must take huge loans which may not be proportionate to their income.

I urge the Government to look into the following to help the sandwich class:


Raise the income ceiling of $8,000 to take into account the almost doubling of housing prices, as well as general inflation;


Increase the supply of executive condominiums;


Increase the supply of new public housing so unsuccessful applicants for new HDB flats will not put additional upward pressure on the resale housing market; and


Implement anti-speculation measures to cool down private property prices.

Given that the HDB resale index may be a lagging indicator since resale transactions entered by buyer and seller may take up to three months before HDB approves the resale application, the housing price index is even higher than it appears. It is already common in the resale market for sellers to ask cash over valuation ranging from $15,000 to $30,000.

The Government is encouraging families to procreate, but imagine what future generations will have to fork out to own a place that they call home.

Chew Kim Cheer

 

[po2wq]

what happened to the middle-class ? ...

wat classes? ...

there's oni gr8er n lesser mortals ... there's nothin betwin dem ...

 

[zhihau]

what happened to the middle-class ?
in today's ST, first we have 'homes more affordable due to strong wealth creation in recent years', and then ... we have 'more families seek help' ... ?!

sis,

according to the stats given, the average household income is about SGD$7750.

the average household income of the 1st~20th percentile would be around SGD$1850. 21st~40th percentile would be around SGD$3930. 41st~60th percentile would be around SGD$6095. 61st~80th percentile would be around SGD$8860. and the 81st~100th percentile would be around SGD$16950.

by a glance, some 60% of the household earns below the national average. the bottom 10th percentile and the top 10th percentile has a income gap of some SGD$21700.

figures based on 2008 stats