Let’s do the comparisons right
I REFER to last Saturday’s report, ‘Homes more affordable as incomes rise’.
It is meaningless to compare the current property boom with the peak of 1996 and then conclude that things are better now compared to then. This is akin to comparing the current sub-prime financial crisis with the Great Depression of the 1930s and concluding that things are not so bad.
Likewise, it is meaningless for Citigroup economist Kit Wei Zheng to conclude that things are better now than in 1996. The fact that the current property boom is not the worst does not imply that it isn’t bad.
For a better appreciation of our current situation, we should note that from 1990 to last year, condominium prices increased threefold, whereas during the same period, median household income grew by only 2.1 times. Continue reading
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