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Can Singaporeans afford luxury homes?
By iProperty | Property Blog*–*Tue, May 8, 2012
It takes the average Singapore resident more than half his lifetime to afford a luxury home in his country. Image*…
By Sheena Chua
43 years. That is the number of years that an average Singapore resident needs to pay for a luxury home in the city-state.
The figure was revealed in a Bloomberg report about the growing disparity between incomes and housing prices in emerging markets. The report, which compared national income averages against the prices of homes in prime locations, concluded that Mumbai was the world's least affordable home market. Singapore placed last among the 14 countries ranked, behind other Asian cities like Jakarta (61.7 years), Bangkok (67) and Hong Kong (96.4).
In Singapore, a typical piece of luxury property spanning 100 sq m (about 1,076 sq ft) costs about US$2.71 million (S$3.38 million)—roughly 43 times the nation's average annual income. This means that at an average price of S$3,149 per sq ft, a luxury home here would require an average resident with a typical per-capita purchasing power of US$59,900 (S$74,679) more than half his life to pay off.
Calculations were based on property consultancy firm Knight Frank's housing index, which compiled information from 63 different housing markets, as well as the US Central Intelligence Agency (CIA) World Factbook's gross domestic product (GDP) per capita estimates for 2011.
The GDP per capita estimates are based on the per capita purchasing power parity of each country, which compares how much money is needed in each country to buy similar baskets of goods and services.
CIA World Factbook estimates put Singapore's 2011 per capita purchasing power at around US$59,900 (S$74,679); while Knight Frank's Wealth Report 2011, released early April, revealed that prices of Singapore's luxury home segment has reached US$27,100 per sq m (S$3,149 per sq ft) as of last year.
In other words, a prime location property in Singapore costs about 43 times the city-state's average annual income. Based on the average Singaporean life expectancy of 81.3 years (based on World Bank statistics), the average Singapore resident could be paying for his luxury home for more than half his life. This is, of course, not taking into account other costs of living like utility bills and daily expenses.
Speaking to Bloomberg of the findings, head of residential research at Knight Frank Liam Bailey noted that it is not unusual for developing countries to experience such disparities in wealth. He said, "There are big differences in wealth levels in*emerging markets compared to the developed world, which is part of the course for economic development. In the first phase of growth some people make big fortunes, it takes time for this to trickle down as the middle class develop and generate their own wealth."
While Singapore may not be the anywhere near the ten most expensive luxury home segments in the world, we could be well on our way there. The Wealth Report 2011, compiled by Citi Private Bank and Knight Frank, revealed that the country's luxury housing segment charted an 18% price growth—the third largest hike of the year.
However, the fact remains that over 80% of the Singaporean population still live in public housing. Most homebuyers have to take out housing loans to fund their purchases, and tolerance for surging home prices—even those not in the luxury home segment—are thinning.
These observations suggest a growing income gap between Singapore's middle-class and ultra-rich, and that Singapore still has a long way to go before the majority of its residents can splurge on luxury homes.
service your loan until you die:D:D:D:D
NorthernStar
09-05-12, 15:25
live within your means...Life is more than the luxury things..:)
Sg ppty 42.7 yrs vs Mumbai 308.1 yrs avg income. Given that FT higher income in Sg, no wonder they whack the stretch of D15...cheep cheep
Averages can be very deceiving... Who says home ownerships are spread evenly across the entire population?
"43 years. That is the number of years that an average Singapore resident needs to pay for a luxury home in the city-state" is correct if Average Singapore resident is to pay for it but why don't they get somebody to pay instead and it will be less than 30 years.
The term Luxury home already tell us it's not for everyone. If everyone can afford a 3mil home, then there is only rich man and no middle income or poor man in Singapore.
80% live in hdb is good for Singapore. Not everyone has same capability, same thinking, same behavior, same opinion, same taste, same lifestype, same salary, etc. Buy within means is the key to a happy life.
But also need to aim high with two feets on the ground. Always look for opportunities to grow our wealth and move to a better environment when we can afford. Career advancement is a good starting point. Investments is another.
Although I "Suan" someone on wanting to buy >2m landed, I actually meant well. It's a risky move in my opinion and the family will suffer together. However, I do admire his ambition. I sincerely believe that one day his dream will come true if he works towards it with this goal in mind.
It's okay to day dream with with a plan. :cheers1:
phantom_opera
09-05-12, 19:33
This question is like asking whether Singaporean can afford to eat Sultan fish every week:
http://static.soshiok.com/action/PageImage/12333.jpg
http://soshiok.com/article/12333
How is the figure for "luxury" property derived? Why is it $3149, why not $4000 or 2500? At what price point does it cease to be "luxurious"? What is definition of luxury? Every developer claims their project to be luxurious. How do you compare different standards with different cities. The results can so easily be twisted to suit whatever agenda.:tongue3:
Don't take it too seriously.
Actually I find the tone of this general resentment amazing.... As if "luxury homes should be affordable for average singaporeans" :cool:
If average singaporeans can afford a luxury home, it's not "luxury" already.
The sense of entitlement of these people is amazing. :tsk-tsk:
This reminds me of those people keep complaining CCR and luxury home prices too expensive, keep urging govt must close the gap blah blah blah and forbid foreigners to buy because they are the ones pushing up the prices. Strangest thing is after that they really implement that stupid 10% ABSD! :banghead: Close the gap of property prices without closing the gap of income? Might as well turn democracy into communism where everyone gets the same? :doh:
Actually I find the tone of this general resentment amazing.... As if "luxury homes should be affordable for average singaporeans" :cool:
If average singaporeans can afford a luxury home, it's not "luxury" already.
The sense of entitlement of these people is amazing. :tsk-tsk:
Actually I find the tone of this general resentment amazing.... As if "luxury homes should be affordable for average singaporeans" :cool:
If average singaporeans can afford a luxury home, it's not "luxury" already.
The sense of entitlement of these people is amazing. :tsk-tsk:
They think that because they can buy a berkin. They should be entitled to own a luxury home?? :D
let's see all the 10 cities, with HK included
http://i1029.photobucket.com/albums/y358/maisonjai/cities.jpg
source:bloomberg
They think that because they can buy a berkin. They should be entitled to own a luxury home?? :D
And also a car... not any car... must be beemer. COE up again...
If the average Singaporean buys berkin, breitling and beemer with every last cent they've got (and take loan to pay the remaining), how to have enough to buy a home (shouldn't even think of buying luxury home!)?
They must match the house with the handbag and car mah......
In a global society, it is the top 10% richest people in the world who are owning such homes.:cool:
let's see all the 10 cities, with HK included
http://i1029.photobucket.com/albums/y358/maisonjai/cities.jpg
source:bloomberg
phantom_opera
10-05-12, 09:19
Let me ask the "luxurious" gurus if any:
If I can afford to sell all my OCR/RCR portfolios and stay at Paterson, is it advisable? This is a multi-million dollar question :ashamed1:
My point is many people may be able to stretch up to the MAX and live in luxurious (the so called 3xxxpsf) D9 but they may not choose to do so as it is not wise from investment angle ... some may choose to buy OCR landed instead
Prefer to hold a few properties rather to sell all and stay in a "luxury" home.
Let me ask the "luxurious" gurus if any:
If I can afford to sell all my OCR/RCR portfolios and stay at Paterson, is it advisable? This is a multi-million dollar question :ashamed1:
My point is many people may be able to stretch up to the MAX and live in luxurious (the so called 3xxxpsf) D9 but they may not choose to do so as it is not wise from investment angle ... some may choose to buy OCR landed instead
Me no luxurious guru so you are not asking me but I'll still comment... :D
If my financial muscle does not permit, I'll not give up my investment portfolio in OCR/RCR only to stay in CCR, thus cutting down on my income which will inevitably alter my expense pattern... :47:
Have multiple OCR better than just one CCR.
But there are some rich one with a mix of CCR/RCR/OCR. Where they choose to stay depends on their lifestyle. OK OK better not talk too much on why live in CCR or OCR or else all the two gangs start to fight here.
Spend some money in the OCR home renovation to make inside look LUXURY with designer deco. Buy some nice nice furniture & branded home appliances.
Stay in OCR "luxury" home. Price cheap cheap inside Luxury.
Ok what? ;)
Let me ask the "luxurious" gurus if any:
If I can afford to sell all my OCR/RCR portfolios and stay at Paterson, is it advisable? This is a multi-million dollar question :ashamed1:
My point is many people may be able to stretch up to the MAX and live in luxurious (the so called 3xxxpsf) D9 but they may not choose to do so as it is not wise from investment angle ... some may choose to buy OCR landed instead
I'm not a luxurious guru as well.....but I would suggest keep the largest RCR that fits your family needs and requirements. Sell all the OCR and remaining RCR and buy 1 or more CCR for investment.
I have my own definition for CCR and its only D1,D2, Sentosa, D9, D15. RCR to me is D10, D11, D4. The rest are OCR to me. In an up market like what we have experienced for the last 5 years, any ppty in Sg seems like a good investment. However, when the market undergoes correction, I feel safer with a CCR ppty as investment.
Note: I'm vested in some of these areas thus I'm definitely bias in my opinion.
why must luxury home? Have a home of own is good enough. If everyone in Singapore have luxury home. then the home is no longer consider luxury.
Compare in the 60s. Live in kampong. HDB consider luxury home? Who cares abt luxury home a not? min is at least have a home to call own.
If I can afford to sell all my OCR/RCR portfolios and stay at Paterson, is it advisable?
no guru, but to buy Paterson at 5000psf now as own home, this person should have already stopped counting his millions. If he is not, better not do it.
btw evergreen/kane, it's "birkin" not "berkin" ;)
new2mondrian
10-05-12, 10:54
Actually the point regarding selling OCR properties to buy one CCR property is moot. It simply does not make sense at current rental yields. Properties here are not priced according to yield, hence the pricing is not fully reflective.
Taking a simplistic example. A person buys 4 OCR condos at $1.1m each, and each unit is 1200sqft. He rents them out at $3,300 per unit per month. Total rental income is $13,200 for a total investment of $4.4m.
He uses $10k to look for a 1500sqft and above unit in D9, D10. He can find places around river valley (cosmopolitan, Martin place) or orchard road (cairnhill) with this budget. And he has spare change of $3k plus.
Taking the buy example, he cannot even find a 1500sqft condo at the same areas with $4.4m.
rattydrama
10-05-12, 11:10
Rental yield is one issue. However, if the gap continues to narrow, buyer will flock back to CCR as it could present a greater chance for cap appreciation or preservation. Also FH big estate are harder to find now.
Right now new launch SH at 1700psf... i will watch launches in good ocr location closely.
Maybe the price will nvr correct. :cool: sianzzzzzz
no guru, but to buy Paterson at 5000psf now as own home, this person should have already stopped counting his millions. If he is not, better not do it.
btw evergreen/kane, it's "birkin" not "berkin" ;)
lol..
i also dunno birkin or berkin...
i only know LV ...:D
lol..
i also dunno birkin or berkin...
i only know LV ...:D
You must be a guy. I also don't know ;)
no guru, but to buy Paterson at 5000psf now as own home, this person should have already stopped counting his millions. If he is not, better not do it.
btw evergreen/kane, it's "birkin" not "berkin" ;)
Yalor, should have his private accountant doing all the counting...:D
You must be a guy. I also don't know ;)
I onli know belkin:scared-5:
Rental yield is one issue. However, if the gap continues to narrow, buyer will flock back to CCR as it could present a greater chance for cap appreciation or preservation. Also FH big estate are harder to find now.
Right now new launch SH at 1700psf... i will watch launches in good ocr location closely.
Maybe the price will nvr correct. :cool: sianzzzzzz
Dont be so sure... a certain person by the name of Stanlingrad will BEG TO DIFFER..... he will not even buy CCR even if same price coz got traffic jam and noisy.... he prefer Carabelle
Dont be so sure... a certain person by the name of Stanlingrad will BEG TO DIFFER..... he will not even buy CCR even if same price coz got traffic jam and noisy.... he prefer Carabelle
Don't think Stanlingrad will ever appears again. He already kena exposed. He's history already.
Unless he transform into another nick if he want to discuss this topic.
Don't think Stanlingrad will ever appears again. He already kena exposed. He's history already.
Unless he transform into another nick if he want to discuss this topic.
i missed it, who is he??
Got to ask Pinball. He's the one who gave the multiple choices.
I can't remember which thread already. Brain always malfunction when I needed it to work.
One thing for sure he is not local.
Not an Angmo. He is a Chinese.
Got to ask Pinball. He's the one who gave the multiple choices.
I can't remember which thread already. Brain always malfunction when I needed it to work.
One thing for sure he is not local.
Not an Angmo. He is a Chinese.Oh, izzit, when he keep lecturing others about our English...:doh:
I tot only admin can track IP? Pinball is admin?
Let me ask the "luxurious" gurus if any:
If I can afford to sell all my OCR/RCR portfolios and stay at Paterson, is it advisable? This is a multi-million dollar question :ashamed1:
My point is many people may be able to stretch up to the MAX and live in luxurious (the so called 3xxxpsf) D9 but they may not choose to do so as it is not wise from investment angle ... some may choose to buy OCR landed instead
No. Coz gone are the days when you can get 250% capital gain appreciation in few years like Icon....
Don't think Stanlingrad will ever appears again. He already kena exposed. He's history already.
Unless he transform into another nick if he want to discuss this topic.
Kena expose what ah? He indeed disappear for a long time liao....
Kena expose what ah? He indeed disappear for a long time liao....
OK. Just for the fun only
Give you guys some hints. It's about location location location.
For a person who claim don't like CCR and city traffic jam and living in West Coast; where could he be working & what could be his profession?
Actually no need to be shy lah. Can be friends and view showflats or group buy units or renovate together to get more discount mah.
OK. Just for the fun only
Give you guys some hints. It's about location location location.
For a person who claim don't like CCR and city traffic jam and living in West Coast; where could he be working & what could be his profession?
Teacher in NUS?
Teacher in NUS?
Lecturer I think. That's why always conduct online English class. :D
btw evergreen/kane, it's "birkin" not "berkin" ;)
Berkin is the one that is made in China :p
Actually no need to be shy lah. Can be friends and view showflats or group buy units or renovate together to get more discount mah.
You want to be his friend? :D
OK. Just for the fun only
Give you guys some hints. It's about location location location.
For a person who claim don't like CCR and city traffic jam and living in West Coast; where could he be working & what could be his profession?
Means I have to be careful when I access this forum? :scared-3: How come the information was shared with other forumers?
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