Tilak Spore housing and affordability Aug 2016

Tilak Spore housing and affordability Aug 2016 - (Not for...

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(Not for circulation) Singapore Housing Market Price Dynamics and Affordability Tilak Abeysinghe Department of Economics National University of Singapore Aug 2016
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Housing Program High-rise living Public housing? Housing and Development Board (HDB) Privately owned, 99 year lease (Hong Kong – public housing, rented) Private housing (apts, condos and landed property-detached, semi-detached, terrence) - 99 year lease - 999 year lease - freehold
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Evolution of Housing policies Public housing with private ownership. 1960 soon after self-governance Housing and Development Board (HDB) was established to provide heavily subsidized housing to Singaporeans ( subject to income ceiling ). Program has undergone many changes over the years. Initially pricing was construction-cost based, then construction cost and land cost based. Later market based (HDB re-sale mkt; HDB re- sale prices move with private housing prices).
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Evolution of Housing policies 1968 – HDB offers mortgage loans (interest rate 6.25%). CPF mortgage scheme: for down- payment and mortgage payment; undergoes changes over the years). 1981 – extended CPF use for purchasing private residential properties 1986 – HDB interest rate pegged 0.1 points above the CPF rate. 1989 – Perm residents allowed to buy HDB re- sale flats. (Since 1976 foreigners could buy private residential properties subject to some restrictions.)
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Evolution of Housing policies 1991 – Singles above age 35 allowed to buy 3- room or smaller HDB flats outside central area (further relaxed to any size in any area in 2004). Owners of new HDB flats allowed to invest in private resi properties, but must live in HDB flats. 1994 – min residency requirement in new HDB flats raised to 5 years. 1996 – anti-speculative measures and pricking the house price bubble. (relaxed in later years.)
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Evolution of Housing policies 2007 – anti-speculative measures again but relaxed later. 2010 – measures to delink HDB market from private market to improve HDB affordability and to contain escalating property prices. HDB flats buyers cannot own private properties in Singapore or in foreign countries. Built to order scheme for HDB flats. En-bloc sale in private residential market.
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House type and income Public (HDB) Private 1-2 Room 3-Room 4-Room 5-Room Exec Condo Landed Size sq m 60-70 75-95 95-125 130-145 Avg monthly hh income S$ 2007/08 2012/13 1,373 1,906 3,946 5,130 5,737 8,088 9,028 11,044 17,176 20,536 21,198 26,058 Income data from household expenditure survey.
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Housing Stock (units) HDB and Other Govt Private Total Rented or Vacant 1,2,3- room 4-room 5-room Exec Total HDB+ 2005 276605 327701 207299 65160 879566 229356 1108922 99803 2006 272736 330416 207879 65153 879092 233364 1112456 100121 Growth -1.4 0.8 0.3 -0.01 -0.1 1.7 0.3 0.3
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Housing Wealth Inequality Public Share Private Share Stock (units) 80% 20% Value (estimate) 50% 50%
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House Prices (S$) HDB flats Private Condo New flats Re-sale flats 3-room 4-room 5-room Exec 3-room 4-room 5room Exec 1970s 15,000 20,000 30,000 - - - - - 104,000 (1975) 2014 164,000 (BTO) 258,000 (BTO) 371,000 (BTO) - 315,000 418,000 460,000 585,000 1.24 mn
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