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OK, so maybe there’s really not much to say for July 2010 after all; unless you count the “usual” economic troubles with Europe, the housing crisis in USA, and the red-hot (but possibly overheating) property market in China. It’s basically the same old stories and news being churned over and over again for dramatic effect (playing out like a Mediacorp drama serial, no less), where the headlines and presenters are the only things changing. This has the unfortunate effect of making me very sleepy and my mind has the tendency to just “switch off” when any of these news topics come up. I apologize if I had really missed anything of significance which I somehow failed to include in this month-end summary; but then again if it was really that important most people would have known about it without me saying anything (unless you were a hermit living in a cave in the last 6 months).
So with that out of the way, I can focus on commenting on something much closer to home – property market, cars and personal finance! Apparently, HDB resale prices have hit yet another high for eight straight quarters; in the last quarter April to June 2010 prices inched up another 4.1%; with median cash over valuation (“COV”) rising to S$30,000. Some “hot” estates even saw COV rising to as high as S$80,000 to S$100,000 (as reported by Business Times July 24, 2010). This is indeed very preposterous and disturbing and it seems to be a trend of never-ending prices rises which will culminate into increased inflation for all. Private home prices have gone up as well by 5.3% in 2Q 2010 even though sales have slowed. Prices have been up 11.6% since January 2010 and are “expected to climb further”, according to pundits and “experts”. Just two days ago it was reported that a condominium called “The Scala” (located close to the soon to be opened Lorong Chuan MRT station on the Circle Line) was swamped with people trying to get a piece of it, such that a balloting system had to be set up to determine who could ENTER the showflat! Not to mention the blank cheques being waved at the agents. It sounds like a property frenzy all over again.
There are two major worries I have in relation to the escalating property prices, which for HDB resale have surpassed 1996’s peak. One is in relation to income levels, which have not risen by much in real terms despite Singapore reporting red-hot GDP growth of a projected 15%, trouncing even China and India. It was recently reported that a property costs about 22 times a typical China family’s income, and this is presumed to be unsustainable in the long-term and will correct itself. The question is how many times is a property worth in Singapore compared to a couple’s annual income? Assuming the median income of S$2,400 per person (as reported in the news some time back), this translates to S$4,800 per couple and is S$57,600 per year. Assuming a S$1 million condo (for high-end) and a mass market condo costing S$600,000 (incidentally, many resale HDB in prime areas now cost this much too!), this translates to a property being about 17.4 times to 10.4 times a couple’s annual income. Unless the data is somehow skewed in terms of median income, I’d say this is one big red flag. Read more...[caption id="attachment_3296" align="alignright" width="150" caption="Photo by The Wandering Angel"][/caption]
OK, so maybe there’s really not much to say for July 2010 after all; unless you count the “usual” economic troubles with Europe, the housing crisis in USA, and the red-hot (but possibly overheating) property market in China. It’s basically the same old stories and news being churned over and over again for dramatic effect (playing out like a Mediacorp drama serial, no less), where the headlines and presenters are the only things changing. This has the unfortunate effect of making me very sleepy and my mind has the tendency to just “switch off” when any of these news topics come up. I apologize if I had really missed anything of significance which I somehow failed to include in this month-end summary; but then again if it was really that important most people would have known about it without me saying anything (unless you were a hermit living in a cave in the last 6 months).
So with that out of the way, I can focus on commenting on something much closer to home – property market, cars and personal finance! Apparently, HDB resale prices have hit yet another high for eight straight quarters; in the last quarter April to June 2010 prices inched up another 4.1%; with median cash over valuation (“COV”) rising to S$30,000. Some “hot” estates even saw COV rising to as high as S$80,000 to S$100,000 (as reported by Business Times July 24, 2010). This is indeed very preposterous and disturbing and it seems to be a trend of never-ending prices rises which will culminate into increased inflation for all. Private home prices have gone up as well by 5.3% in 2Q 2010 even though sales have slowed. Prices have been up 11.6% since January 2010 and are “expected to climb further”, according to pundits and “experts”. Just two days ago it was reported that a condominium called “The Scala” (located close to the soon to be opened Lorong Chuan MRT station on the Circle Line) was swamped with people trying to get a piece of it, such that a balloting system had to be set up to determine who could ENTER the showflat! Not to mention the blank cheques being waved at the agents. It sounds like a property frenzy all over again.
There are two major worries I have in relation to the escalating property prices, which for HDB resale have surpassed 1996’s peak. One is in relation to income levels, which have not risen by much in real terms despite Singapore reporting red-hot GDP growth of a projected 15%, trouncing even China and India. It was recently reported that a property costs about 22 times a typical China family’s income, and this is presumed to be unsustainable in the long-term and will correct itself. The question is how many times is a property worth in Singapore compared to a couple’s annual income? Assuming the median income of S$2,400 per person (as reported in the news some time back), this translates to S$4,800 per couple and is S$57,600 per year. Assuming a S$1 million condo (for high-end) and a mass market condo costing S$600,000 (incidentally, many resale HDB in prime areas now cost this much too!), this translates to a property being about 17.4 times to 10.4 times a couple’s annual income. Unless the data is somehow skewed in terms of median income, I’d say this is one big red flag. Read more...
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OK, so maybe there’s really not much to say for July 2010 after all; unless you count the “usual” economic troubles with Europe, the housing crisis in USA, and the red-hot (but possibly overheating) property market in China. It’s basically the same old stories and news being churned over and over again for dramatic effect (playing out like a Mediacorp drama serial, no less), where the headlines and presenters are the only things changing. This has the unfortunate effect of making me very sleepy and my mind has the tendency to just “switch off” when any of these news topics come up. I apologize if I had really missed anything of significance which I somehow failed to include in this month-end summary; but then again if it was really that important most people would have known about it without me saying anything (unless you were a hermit living in a cave in the last 6 months).
So with that out of the way, I can focus on commenting on something much closer to home – property market, cars and personal finance! Apparently, HDB resale prices have hit yet another high for eight straight quarters; in the last quarter April to June 2010 prices inched up another 4.1%; with median cash over valuation (“COV”) rising to S$30,000. Some “hot” estates even saw COV rising to as high as S$80,000 to S$100,000 (as reported by Business Times July 24, 2010). This is indeed very preposterous and disturbing and it seems to be a trend of never-ending prices rises which will culminate into increased inflation for all. Private home prices have gone up as well by 5.3% in 2Q 2010 even though sales have slowed. Prices have been up 11.6% since January 2010 and are “expected to climb further”, according to pundits and “experts”. Just two days ago it was reported that a condominium called “The Scala” (located close to the soon to be opened Lorong Chuan MRT station on the Circle Line) was swamped with people trying to get a piece of it, such that a balloting system had to be set up to determine who could ENTER the showflat! Not to mention the blank cheques being waved at the agents. It sounds like a property frenzy all over again.
There are two major worries I have in relation to the escalating property prices, which for HDB resale have surpassed 1996’s peak. One is in relation to income levels, which have not risen by much in real terms despite Singapore reporting red-hot GDP growth of a projected 15%, trouncing even China and India. It was recently reported that a property costs about 22 times a typical China family’s income, and this is presumed to be unsustainable in the long-term and will correct itself. The question is how many times is a property worth in Singapore compared to a couple’s annual income? Assuming the median income of S$2,400 per person (as reported in the news some time back), this translates to S$4,800 per couple and is S$57,600 per year. Assuming a S$1 million condo (for high-end) and a mass market condo costing S$600,000 (incidentally, many resale HDB in prime areas now cost this much too!), this translates to a property being about 17.4 times to 10.4 times a couple’s annual income. Unless the data is somehow skewed in terms of median income, I’d say this is one big red flag. Read more...
