Home prices in Singapore now more affordable, according to study
Singapore homes recorded a slight decline in their median price last year, according to the 13th Annual Demographia International Housing Affordability Survey.
In 2016, the home price here was 4.8 times the median annual pretax household income. While this is an improvement from the 5.1 recorded since the study started tracking the city-state in 2013, it cannot be deemed as ‘affordable’ as that rating requires a multiple of 3.0 and below.
Nevertheless, Singapore is among the three countries, aside from Japan and Ireland, where there were no ‘severely unaffordable’ housing markets, with median prices equivalent to 5.1 times the yearly household income or above.
Although a multiple of 4.8 is considered ‘seriously unaffordable’ by Demographia, the organisation praised the city-state’s authorities for implementing measures to keep residential prices within the means of the masses despite physical limitations.
“Singapore has perhaps the most land constrained geography of any major metropolitan area in the world, occupying a highly developed island, with no mainland periphery within its national jurisdiction. As a result, there is virtually no potential for greenfield development and it is difficult to maintain a competitive supply of land.”
Despite this, it has established a publicly sponsored housing program that not only played a role in creating a vibrant market for private residential properties, but it also propelled Singapore’s home ownership rate to 88 percent, the highest in the world. This is a startling contrast 50 years ago, when it was dotted by many squatter settlements, it added.
Meanwhile, Hong Kong (18.1) remained as the most expensive housing market for seven straight years, followed by Sydney (12.2) and Vancouver (11.8). On the other hand, the most affordable were Racine in Wisconsin, Michigan’s Bay City and Decatur in Illinois, with the multiple ranging from 1.8 to 1.9.
Demographia’s latest survey covers 406 metropolitan housing markets across nine countries, namely Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the UK and the United States, with data as of Q3 2016.
Christopher Chitty, Senior Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email christopher@propertyguru.com.sg
