TL;DR – Don’t be too picky then still can la…
I’ve reached the stage in my life where I am thinking of getting my own place. So I’ve been looking at housing options. Then I saw the prices. Which drastically restricts the options I have. I can’t help but wonder, why are housing prices so high? At such prices, I would really have to be very prudent with my spending to be able to afford the type of housing that I really want.
As I was thinking about this and griping to friends, I came across this article about how home ownership is out of reach for young Hong Kongers.
A 268 sq ft apartment in Wan Chai can cost as much as HK$5.5 million (about S$1 million). How big is 268 sq ft? A typical 3-room HDB flat in Singapore is about 650-700 sq ft. And you can get a 3-room HDB flat in Bukit Batok on the resale market for about S$280,000. Wow. That definitely puts the a whole different spin on my idea of affordability.
At such high prices, only 26% of Hong Kong youths (i.e. aged between 18 and 34) plan to buy a flat. Because for most of them, they think that it’s simply not possible for them to afford one.
And to get a public rental flat is also not easy. Apparently if you wanted to get a public rental flat in Hong Kong, even if you met all the criteria, you would have to wait 32 years. That’s right. 32 years.
Incidentally, did you know that the home ownership rate in Singapore is 91%, and that makes us top three in the world. Another noteworthy statistic is that HDB flats houses over 80% of our population. In comparison in Hong Kong, public housing only contributes 30%.
With such limited supply of housing, it’s no wonder Hong Kong tops the table for the most unaffordable housing in the world. In fact Hong Kong has held the record for having the least affordable housing in the world, six years in a row.
According to the International Housing Affordability Survey 2016, the median price of housing in Hong Kong is 19 times that of Hong Kong’s median annual household income.
Where does Singapore stand?
Based on the same survey, the median price of housing in Singapore is 5 times that of Singapore’s median annual household income. Is that high? It depends on who you want to compare to. Compared to cities like Cleveland, Ohio, our housing would appear a lot more expensive. In Cleveland, the median price of housing is about 2.6 times their median household income.
But compared to New York, London, San Francisco, Perth, Melbourne, and Sydney, Singapore’s housing would seem to be a lot more affordable.
And the way this survey calculates median housing price in Singapore probably doesn’t include all the grants that are available for first time HDB flat buyers. Did you know that it’s possible to get up to $80,000 in grants if you’re buying a new HDB flat?
Also, I am quite sure this survey doesn’t include employers’ contribution to CPF in the calculation of median household income, of which a sizeable portion can be used to pay for mortgages. Put all these together, Singapore’s housing is probably more affordable than what the survey would have us believe. I found an interesting blogpost that talked about how young Singaporeans actually need not worry about not being able to afford a flat, read it here.
Interestingly, the survey doesn’t include any of the Taiwanese cities. I found this clip which shows Singaporeans, Hong Kongers and Taiwanese discuss the affordability of housing.
It seems that the Taiwanese also find it incredibly difficult to get their own property. Here’s a father talking about his daughter’s aspiration of buying an apartment in a certain area in Taiwan:
What? Wait for 40 years before being able to get that property? Is that for real?
Well… apparently so. This young Taiwanese man is even more pessimistic:
He went on to say that the only way a young Taiwanese would be able to afford a property is if he won Lotto (their version of Toto).
Limited options in Singapore… but still got options…
From that perspective, I suppose things aren’t too bad. Yes. My options are limited. But at least I have some options. Unlike the Taiwanese, I don’t have to wait till I strike the first prize of Toto to be able to afford a property (even though I really won’t mind striking Toto). And… honestly, the options available to me are good enough for me. After all, you don’t really need much space for… (get your mind out of the gutter)… a cosy and happy home.
Meanwhile, I’ll leave you with the link to check out some rather incredible photos of shoebox living in Hong Kong, taken by Benny Lam.