BTO flats remain affordable, prices have risen in tandem with incomes

[The_King]

SINGAPORE: Build-to-Order (BTO) flats remain affordable, with flat prices moving in tandem with incomes, said Deputy Prime Minister Lawrence Wong on Monday (May 1).

Speaking during the May Day Rally, Mr Wong said: "When you think about affordability, please don't just look at the headline price of the BTO flat; also consider how the price relates to income, as well as the proportion of income that's needed to service the housing loan."

The typical household currently uses less than 25 per cent of their income to service their home loan, like in 1980, he said in his speech.

In 1980, the price of a four-room BTO flat in a new town was about S$40,000 (US$30,000), and the median household income was around S$900. 

Currently, the price of a similar flat in a non-mature estate like Bukit Batok costs S$350,000 – prices have risen by nearly 10 times since 1980, said Mr Wong, who is also Finance Minister. 

"But the median household income has risen 10 times too, from S$900 in 1980 to S$9,000 today. So BTO flat prices have in fact moved in tandem with incomes," said Mr Wong. 

This comparison also does not include housing grants of up to S$80,000 for first-time buyers, he added. 

"So if you do a proper comparison, a fair comparison, BTO flats remain affordable," said the Deputy Prime Minister.

"The vast majority of our first-time homebuyers today service their housing loans through their CPF (Central Provident Fund) contributions, with very little or even no out-of-pocket cash," he added.

The main problem Singapore is facing today is insufficient BTO flats due to supply delays because of the COVID-19 pandemic, said Mr Wong. 

"We are steadily catching up on the backlog – ramping up supply and building more BTO flats," he added, noting that 20,000 flats will be completed this year.

He said Singapore has created the "world's best public housing".

"Affordable and accessible public housing – like access to first-rate education and healthcare – will always be a key part of our social compact in Singapore," Mr Wong added.

 

 

Resale prices of Housing and Development Board (HDB) rose by 1 per cent in the first quarter of 2023 – the smallest quarterly rise in the last 10 quarters.

Prices of private homes rose by 3.3 per cent in the first quarter of this year, higher than the 0.4 per cent increase in the preceding quarter.

Singapore rolled out another round of property cooling measures last week – its third since December 2021.

Foreigners buying any residential property in Singapore will now have to pay an additional buyer's stamp duty (ABSD) of 60 per cent – doubled from 30 per cent.

Singaporeans buying their second residential property will pay an ABSD rate of 20 per cent, up from 17 per cent, while those buying their third and subsequent residential property will have to pay an increased rate of 30 per cent, up from 25 per cent.

Singaporeans buying their first property will not have to pay ABSD.

The rate of 30 per cent also applies to permanent residents buying their second residential property. PRs buying their third and subsequent residential property will pay an ABSD of 35 per cent, up from 30 per cent.

Minister for National Development Desmond Lee said last week that the increased rates were a pre-emptive step to dampen local and foreign investment demand amid renewed interest in residential properties. 

Summary of the new ABSD rates.

[The_King]

the 1980s, mostly is single income, now it double income. if median household income was around S$9000, then explain this 2 in 3 working Singaporeans do not have savings to last them beyond 6 months

 

https://www.straitstimes.com/business/banking/2-in-3-working-singaporeans-do-not-have-savings-to-last-them-beyond-6-months-ocbc

 

 

 

Edited May 1, 2023 by The_King

[XianGe]

Celery 9k? But how many families really on >9k? And what abt those left behind? What abt those cannot 2 income? 

[The_King]

42 minutes ago, XianGe said:

Celery 9k? But how many families really on >9k? And what abt those left behind? What abt those cannot 2 income? 

if  median income is $9,000 then how anyone can explain this?

 

2 in 3 working Singaporeans do not have savings to last them beyond 6 months

 

 

 

 

 

let me do the 1yr of  median income is $9,000 = 108k

108k - 25% (typical household currently uses less than 25 per cent of their income to service their home loan) = 27k (service their home loan)

 

so they left 81k the 81k ( 75% saving cannot last 6 month) - the 6month aka 81k = 0k left to eat.

 

my math failed

 

 

[ManOfTheHour]

Singaporeans are awful at saving money

everything yolo travel nonsense. I see ppl earn 4k go buy Rolex 🤦🏻‍♂️

[noobmaster]

3 hours ago, ManOfTheHour said:

Singaporeans are awful at saving money

everything yolo travel nonsense. I see ppl earn 4k go buy Rolex 🤦🏻‍♂️

Young kids are very yolo

[ManOfTheHour]

5 minutes ago, noobmaster said:

Young kids are very yolo

Even adults. Shocking. Earn 3k buy car and have 6 kids  
 

[coffeenut]

Heng got CPF to mandatorily save people from crappy financial planning

 

Also, people hooked on the flip BTO for profit gains, plus got those who get parachute payments from their parents

[aaur4man]

25 minutes ago, ManOfTheHour said:

Even adults. Shocking. Earn 3k buy car and have 6 kids  
 

 

this is not stupid, its actually very clever.

[ManOfTheHour]

1 minute ago, aaur4man said:

 

this is not stupid, its actually very clever.

Cos taxpayers pay everything for them?

[metalrover]