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27-12-2013, 11:00 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
http://therealsingapore.com/sites/default/files/field/image/HDB-Resale-Index_0.jpg
Double in 6 years.
Here is the US housing bubble and subsequent collapse.
http://blogs.r.ftdata.co.uk/ftdata/files/2013/03/US-mortgages-and-house-prices.jpg
The US housing prices doubled from 1994 to 2006, taking abt 12 ears.
Consider these facts:
HDB doubles in 6 yrs, US housing bubble saw doubling after 12 years.
The average price of a landed US home sold today is US$152,0000 [Link] (http://www.statisticbrain.com/home-sales-average-price/)
This home is a landed property with 3 bed room such a home costs S$3M in S`pore.
The minimum wage in USA is US$7 per hr abt $8.5 per hr.. Hourly wages in a Singapore fast food restaurant is about $5.5 per hr....just to get some sensing...
more than 300,000 Singaporeans and permanent residents who earn less than S$1,500 a monthLink (http://m.todayonline.com//singapore/working-poor-not-earning-enough-make-ends-meet) their pay rose an average 1-2% during the period HDB prices doubled.
Median household income rose 41% (nominal) during the period when HDB flats more than doubled. i.e. the increase in housing prices was more than double that of rise in nominal income. All the extra money to buy HDB came from rising household debts fueled by low interest rates.
Can someone tell me why trouble is not brewing under such a scenario? The high house hold debt. The relative housing price gap between us and USA, does it affect business costs and competitiveness? Our businesses have to pay far higher for rentals and business costs and our workers have to pay much more for housing and forced to take up more debt to house their families. The situation is only sustainable when we have nearly full employment and low interest rates both of which do not last forever. with such high costs, then only way to remain competitive was to import cheap labor and keep wages down. That was also not a sustainable plan.
At the macro level when housing was on the rise, it fuel bank borrowings, construction boom and property related activity that created economic growth even as exports were weak.....if the reverse takes place, the drag on our economy will be high....and long lasting as a vicious down cycle takes hold.
Housing bubbles typically mark last phase growth in US, Japan,Europe, ....looking rosy and well managed on the way up ...then leaving a mess on the way down.
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?171359-What-HDB-resale-price-rise-look-like-and-the-serious-implications&goto=newpost).
http://therealsingapore.com/sites/default/files/field/image/HDB-Resale-Index_0.jpg
Double in 6 years.
Here is the US housing bubble and subsequent collapse.
http://blogs.r.ftdata.co.uk/ftdata/files/2013/03/US-mortgages-and-house-prices.jpg
The US housing prices doubled from 1994 to 2006, taking abt 12 ears.
Consider these facts:
HDB doubles in 6 yrs, US housing bubble saw doubling after 12 years.
The average price of a landed US home sold today is US$152,0000 [Link] (http://www.statisticbrain.com/home-sales-average-price/)
This home is a landed property with 3 bed room such a home costs S$3M in S`pore.
The minimum wage in USA is US$7 per hr abt $8.5 per hr.. Hourly wages in a Singapore fast food restaurant is about $5.5 per hr....just to get some sensing...
more than 300,000 Singaporeans and permanent residents who earn less than S$1,500 a monthLink (http://m.todayonline.com//singapore/working-poor-not-earning-enough-make-ends-meet) their pay rose an average 1-2% during the period HDB prices doubled.
Median household income rose 41% (nominal) during the period when HDB flats more than doubled. i.e. the increase in housing prices was more than double that of rise in nominal income. All the extra money to buy HDB came from rising household debts fueled by low interest rates.
Can someone tell me why trouble is not brewing under such a scenario? The high house hold debt. The relative housing price gap between us and USA, does it affect business costs and competitiveness? Our businesses have to pay far higher for rentals and business costs and our workers have to pay much more for housing and forced to take up more debt to house their families. The situation is only sustainable when we have nearly full employment and low interest rates both of which do not last forever. with such high costs, then only way to remain competitive was to import cheap labor and keep wages down. That was also not a sustainable plan.
At the macro level when housing was on the rise, it fuel bank borrowings, construction boom and property related activity that created economic growth even as exports were weak.....if the reverse takes place, the drag on our economy will be high....and long lasting as a vicious down cycle takes hold.
Housing bubbles typically mark last phase growth in US, Japan,Europe, ....looking rosy and well managed on the way up ...then leaving a mess on the way down.
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?171359-What-HDB-resale-price-rise-look-like-and-the-serious-implications&goto=newpost).