The 12th annual Demographia International Housing Affordability Survey has ranked Singapore housing as seriously unaffordable with a grading index of 5.0.
Measuring the affordability of 87 metropolitan housing markets in 9 countries, the report found Hong Kong to be the least affordable at 19.0 in the housing affordability index.
The survey ranks affordability based on the “median multiple” in each housing market.
Affordability Grading Index:
Score of 3.0 or below – deemed affordable;
3.1 to 4.0 – moderately unaffordable;
4.1 to 5.0 – seriously unaffordable;
5.1 and above - severely unaffordable.
Formulae for affordability assessment:–
Median house price divided by gross annual median household income.
According to the report:
- Property cooling measures have successfully kept the prices of HDB flats and private homes in check in Singapore.
- Affordability for new homes have further improved owing specifically to a moderate reduction in homes prices and an elevated supply of public and private homes coming onstream currently.
- Singapore has by far been ‘more successful’ in its measures in governing housing affordability, as against other markets employing the British urban containment model.
Against this backdrop, markets with serious housing affordability issues include places like Hong Kong, topping the chart at 19.0, while Sydney, Vancouver, San Jose, Melbourne, Auckland, San Francisco and London reaching levels between 8.0 to 12.2, the report said.
