ANALYSIS OF PRIVATE HOUSING MARKET TAPPING ON HDB UPGRADERS

Abstract

Singapore’s property market has performed well in 2007. The prices for private residential property and HDB resale flats went up by 31% and 17.4% respectively in 2007. Both the private property market and public resale prices are anticipated to continue to grow in 2008 despite the global financial crisis attributed by the US subprime mortgage crisis. This study seeks to examine the current affordability level of potential upgraders and to find out whether the private housing market will benefit from HDB upgraders. The survey result has shown that there are only 178 out of the 500 respondents plan to upgrade to private housing. The findings have revealed that 62% of the 178 potential upgraders are eligible to upgrade to the private housing which they preferred. However, many of the potential HDB upgraders have to compromise to a smaller size condominium unit in order to upgrade to private housing. Some of them might be priced out of the year 2008’s private housing market as the housing prices keep growing. With less than half of the 500 respondents are eligible and more than half of them expressed that they do not want to upgrade to private housing, it is unlikely that the private housing market will benefit from HDB upgraders. The study also shows that the housing price is not the main and only reason which makes private housing unattractive to HDB residents. Most of them are satisfied with their existing living environment. It is also found that the private housing preference is related to household characteristics and also the odds of buying private housing will increase as the financial ability increases, indicating a close interaction between the odds of upgrading and the affordability level of a household.