AFFORDABILITY AND THE THRESHOLD UPGRADER

Abstract

With the population of Singapore becoming more affluent, there has been an increase in the number of people who aspire to own private housing. Due to the scarcity of land resources in Singapore, private property prices have been escalating over the years. This issue has become a major concern to Singaporeans. Private property which are affordable a few years ago may be out of reach to the same potential buyer now. Hence it is important to examine the affordability of five room and top end upgraders towards the purchase of a condominium unit in Singapore. Although the implications are drawn from the Singapore housing experience, valuable lessons can be learnt for other emerging countries as well, especially if that country's legislative and financing framework is similar that to ours. Four variables are used as a measure in accertaining the affordability of upgrader to purchase a condominium unit locally. Affordability is determined by variables such as gross household income, HDB resale price, mortgage interest rate and CPF savings. They are chosen since they are postulated to be of significance in measuring the affordability of an upgrader to purchase a condominium unit. Of the four variables proposed, mortgage interest rate proved to be having the greatest influence on the affordability of condominium housing.