Originally Posted by
teddybear
Not a fair analogy by the way.
You should ask in the current world, in the same country, whose income can grow much faster than the property prices? It is the income that has the most effect on property prices. The answer is: the rich.
The rich only buy prime properties, not mass market properties. As such, when prime properties shoot up a lot, nobody cares as the rich can take care of themselves financially (otherwise they won't be rich!).
As for mass market, if the prices shoot up too much, the fall will be horrendeous and soon many of these will be home-less from fore-closure or harassed by loan sharks! Something similar had happened before in 1997 and Singapore govt is determined to see the same won't happened again to the mass market property prices.
Everywhere we go now, the prime properties are usually many times the multiple of mass market properties and the ratio is still increasing. This is true in London, New York, Paris, etc. In London, for example, the properties in Zone 1 (similar to Singapore CCR) could be up to 10 times that in Zone 4 (similar to Singapore OCR), and this is a good comparison to Singapore because the whole of London is about the size of Singapore. Only Singapore is peculiar in that the CCR is on average about 2-3x that of OCR. I let people decide whether the ratio of CCR/OCR prices will increase or decrease? (if we know about London which is a very developed country vs Singapore still developing). There was a time when this CCR/OCR ratio is smaller but this is getting bigger and bigger. Are the general masses making so much money as to comfortably can afford a mass market property at >$1000 psf or the rich can comfortable afford a prime property at >$3000 psf? Who is likely to be more stretched now? If the mass market property prices can go up to $1500 psf, then won't prime property be worth more than $4500 psf even if assume the same ratio?