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I’m very concern to see how fast property prices rose over the past 2 decades especially over the last 5-6 years. Such trend will likely put on a very heavy burden on newer generations like those below 30 yrs old. I remembered that my parents purchased their 5-room HDB flat at around $70,000 back in 1990 and today, the same property rose to as much as $450,000, not including the Cash over Valuation(COV) if they are to sell the house. This means that over the past 20 years, property prices rose 6.5 times at around 10%p,.a.
Though I don’t have the concrete figures, I believe the wage increase in Singapore for a middle income family to be around 3%p.a. Assuming the typical Singaporean wage to be $42,000p.a in 2010, it may means that the average annual wage in 1990 to be around $23,000. If my estimated figure is true, it means that our parents in the past need about 3-4year of their income to pay off their HDB flat. For our generation, it takes 10-11 years of our income to pay it off.
Lets not talk about the demand, supply or the low interest rate environment first, I believe that there are reasons why our government allows this to happens:
1) Older generations are less prepared for retirement
The baby boomers, though may had made a handsome unrealised profit from their property, they are also the same group that probably did not plan for their retirement due to larger families and poor planning. They have little time left, may not have adequate CPF funds for retirement and need a property appreciation to fund their retirement in future, probably via a reverse mortgage. Read more...[caption id="attachment_1054" align="alignright" width="150" caption="Photo by 私奔到月球"][/caption]
I’m very concern to see how fast property prices rose over the past 2 decades especially over the last 5-6 years. Such trend will likely put on a very heavy burden on newer generations like those below 30 yrs old. I remembered that my parents purchased their 5-room HDB flat at around $70,000 back in 1990 and today, the same property rose to as much as $450,000, not including the Cash over Valuation(COV) if they are to sell the house. This means that over the past 20 years, property prices rose 6.5 times at around 10%p,.a.
Though I don’t have the concrete figures, I believe the wage increase in Singapore for a middle income family to be around 3%p.a. Assuming the typical Singaporean wage to be $42,000p.a in 2010, it may means that the average annual wage in 1990 to be around $23,000. If my estimated figure is true, it means that our parents in the past need about 3-4year of their income to pay off their HDB flat. For our generation, it takes 10-11 years of our income to pay it off.
Lets not talk about the demand, supply or the low interest rate environment first, I believe that there are reasons why our government allows this to happens:
1) Older generations are less prepared for retirement
The baby boomers, though may had made a handsome unrealised profit from their property, they are also the same group that probably did not plan for their retirement due to larger families and poor planning. They have little time left, may not have adequate CPF funds for retirement and need a property appreciation to fund their retirement in future, probably via a reverse mortgage. Read more...
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I’m very concern to see how fast property prices rose over the past 2 decades especially over the last 5-6 years. Such trend will likely put on a very heavy burden on newer generations like those below 30 yrs old. I remembered that my parents purchased their 5-room HDB flat at around $70,000 back in 1990 and today, the same property rose to as much as $450,000, not including the Cash over Valuation(COV) if they are to sell the house. This means that over the past 20 years, property prices rose 6.5 times at around 10%p,.a.
Though I don’t have the concrete figures, I believe the wage increase in Singapore for a middle income family to be around 3%p.a. Assuming the typical Singaporean wage to be $42,000p.a in 2010, it may means that the average annual wage in 1990 to be around $23,000. If my estimated figure is true, it means that our parents in the past need about 3-4year of their income to pay off their HDB flat. For our generation, it takes 10-11 years of our income to pay it off.
Lets not talk about the demand, supply or the low interest rate environment first, I believe that there are reasons why our government allows this to happens:
1) Older generations are less prepared for retirement
The baby boomers, though may had made a handsome unrealised profit from their property, they are also the same group that probably did not plan for their retirement due to larger families and poor planning. They have little time left, may not have adequate CPF funds for retirement and need a property appreciation to fund their retirement in future, probably via a reverse mortgage. Read more...
