Singapore public housing rated as highly attainable, affordable: reports
One report ranks Singapore as 11th among the 94 major housing markets for affordability in 2023
PUBLIC housing in Singapore has been rated by two international housing reports as being highly attainable and remaining affordable, said the Housing and Development Board (HDB) on Wednesday (Oct 2).
This comes despite the latest flash data showing public-housing resale prices accelerated in Q3 2024, up 2.5 per cent on robust demand amid still-tight supply conditions. Average prices of resale flats rose 2.9 per cent to S$629,856.
In 2023, Singapore ranked 11th among the 94 major housing markets for affordability, up from 47th place the year before, based on the Demographia International Housing Affordability 2024 report.
It highlighted that public housing flats continue to remain affordable, and Singapore’s home ownership rate was close to 90 per cent – the highest among the markets it tracks.
Demographia rated middle-income housing affordability in 94 major housing markets in eight nations: Australia, Canada, China, Ireland, New Zealand, Singapore, the UK and US.
The reported headline median multiple – a measure of home price to income ratio – for resale HDB flats was 3.8, down from last year’s score of 5.3.
Despite the improvement, which came amid housing grants and subsidies for first-time homebuyers, Singapore’s housing market is still in the moderately unaffordable” range.
According to Demographia, housing is considered affordable if the median multiple is three and below, and moderately unaffordable if the figure is from 3.1 to four.
If the median multiple is 4.1 to five, housing is said to be seriously unaffordable. Anything above five is considered severely unaffordable.
The report also highlighted that home prices rose at about the same rate as income and homeownership became more widespread.
“But affordability is disappearing in high-income nations as housing costs now far outpace income growth,” it said.
It attributed this problem to land use policies that “artificially restrict” housing supply, driving up land prices. The pandemic also lifted demand for housing and prices as people started working from home and households moved from more central areas to suburban areas, stated the report.
Meanwhile, the Urban Land Institute (ULI) ranked Singapore’s public housing as the most attainable across 48 cities in 11 countries in the Asia-Pacific region.
Some of the countries analysed in its 2024 Asia-Pacific Home Attainability Index report include Australia, Indonesia, India and Japan.
The report also noted that the median price of HDB flats was 4.7 times that of median household income.
ULI said home ownership is considered affordable when the ratio of the median home price to median annual household income is below five.
Comparatively, the ratio of median home prices relative to median annual household income ranges from 25 to 32 times in other cities such as Beijing, Manila, Ho Chi Minh City and Shenzhen.
HDB on Wednesday said the resale market remains “largely within reach of buyers”, and flats with very high resale prices form a “very small proportion” of all resale transactions.
“In the last 1.5 years, million-dollar flats accounted for only 2 per cent of total resale transactions,” said HDB. “Among resale transactions of four-room and smaller flats, less than 0.5 per cent were transacted above a million dollars.”
A record number of million-dollar transactions were chalked up in the third quarter with 328 deals, up from 236 in Q2 and 128 in Q1, the latest flash data showed.
In the first nine months of the year, 747 flats cumulatively changed hands over the million-dollar threshold. In comparison, just 469 of such sales were done in the whole of 2023.
Analysts expect the numbers to continue rising steadily, with some projecting million-dollar flat sales to likely exceed 1,000 this year.
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