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Is Singapore housing affordable?

Yesterday, CNA released a rather insightful article on the Singapore property situation in Singapore. For those who are interested in the property scene in Singapore, I strongly encourage a read.

Here are some interesting statistics or key points from the article.

- The median private home price is 13.7 times the median annual household income. This ratio is lower than the surrounding Asian cities. 29.3 in Beijing, 35 in Shenzhen, 26.5 in Hong Kong, 17.8 in Tokyo and 17.3 in Seoul.

- This ratio was 11.7 in 2012. In 2012, the median household income was S$7,566. Currently, the median household income is S$10,099 (this reflects a 33% increase). Comparatively, the median condo price rose about 48% from S$1.07M in 2012 to S$1.59M in 2022. In short, mean private home prices increased more than the median household income over the period 2012 to 2022.

- In the last 10 years, prices for resale condos increased by 32% while prices for new sale condos increased by a whopping 74%! Median household income increased by 39% in the same time period.

- Prices for new sale condos have been on a tremendous growth. The ratio of median new launch home prices to median annual household income have increased from 10.84 to 16.06 over the past 5 years. In the same time period, that same ratio for resale condos remains to be about 11-12.

- The median HDB home price is 4.7 times the median annual household income. Generally, public housing is considered to be affordable if the ratio remains to be below 5. In the past decade, the ratio has always remained below 5.

- Less than 30% of Singapore's population live in private housing.

The article has more in-depth information and graphs so it's definitely worth a read if you want to have a deeper understanding about some statistics in the Singapore property scene. I personally find all these data very insightful and hence summarise those key points above.

From these data, I have some personal thoughts on the situation and just like to pen down in the blog post here.

1) Growth of new launch home prices is far outpacing the growth in household income, but people will still be able to afford it.

From the data above, I am sure all of us can conclude that the new condo prices are absolutely on a tear. Even without those statistics, we can still determine that simply from the fact that you never really see any new launches with prices below S$2,000psf this year. So yes, new condo prices are crazy but people can still afford it despite household income not increasing as fast.


Due to multi-generational wealth. Many of the older generation today have benefited greatly from the property boom over the past decades. They could have got a BTO or EC at subsidised pricing decades ago, flip those properties, and are now sitting on really good property gains. What happens to those gains? They might then decide to transfer some of these gains to their children who are now in their 20s or 30s to help them in affording these new condos. These parents have experienced the benefits of the property boom and are convinced that property is the way to go in accumulating wealth so it's no wonder that they will want their children to do the same. From the latest new launches, you can clearly see such a trend being put in place. Let's take The Reserve Residences as an example, 22% of the buyers are of the age between 21 and 30. Unless these young buyers are all investment bankers, lawyers, or surgeons, it's very hard to see how the young buyers are able to afford these new condos.

2) With the high new launch prices now, it's likely that resale condo prices will begin to slowly creep up too in the near future

If the buyers of the new launches today have the capability to finance the mortgages and buy these new condos at such prices today, they are likely to not want to suffer a loss and will continue to sell the condo at higher prices in the future. This will then push up the resale condo prices eventually.

It's very likely that the buyers today have sufficient financial power to hold their properties (due to the multi-generational wealth). With these holding power, it's unlikely that we will see a crash in the property scene despite the crazy growth of the new launch prices today.

3) It's likely that divergence of private and public home prices might happen in the near future

This is entirely my personal take on the situation. The government will always want to keep public housing affordable and there is no way you will see the ratio of the median HDB prices to median household income go beyond 5. If that ever happens, the policies will have failed us so I don't think that will happen.

However, there is no guarantee that the same ratio for private homes need to be kept below any number. Currently, the ratio for private homes is still well below what you are seeing in Asian cities around us. There is clearly still room to go before the private homes are deemed to be as unaffordable as those in the surrounding Asian cities. Hence, I believe that the private homes might be more unreachable for the general population in the near future. So there will be a good chance that you are even more unlikely to owe a private home in the future compared to now.

So back to the original question in this blog post: is housing in Singapore affordable?

Hell, yes if you are looking at public housing. Despite we complaining about million dollar HDBs, the rise of HDB resale prices seem to be in tandem with the growth in median household income though the rise might be a bit too quick in the past 3 years. However, I am confident that the government will always keep public housing affordable.

If you are looking at private property, well, the answer should also be yes now. But I'm less confident if the answer will still be a yes in the near future. Nonetheless, we ought to take note that private housing wasn't meant to be affordable in the first place. From the way I see it, if your intention is to own private housing, you might want to do it now before it gets too late.

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