WHAT does ‘affordable’ mean?
With rising home prices hitting headlines in recent weeks, Singaporeans are falling over themselves trying to pin down affordability.
The Government, which built its reputation housing a nation, has defended its record. It says that public housing is affordable because new home owners use less than 30 per cent of their income to service their housing loans.
While this is persuasive, public scepticism has been just as strong. The gap exists because there is no agreement on what ‘affordability’ means.
The Government feels flats are affordable because those who applied for them will not be paying through their noses. But this, however, does not take into account home seekers priced out of these flats in the first place.
Many home seekers, meanwhile, feel aggrieved because an HDB flat that does not require a long commute to work is getting out of reach.
Furthermore, a study by National University of Singapore economists Tilak Abeysinghe and Gu Jiaying published last year found that the buying power of people’s lifetime earnings in 2007 was lower than it was in 1990 when tracked against the prices of HDB resale flats. By this measure, the prices of HDB resale flats have become less affordable. Continue reading
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