Overblown Property Market

Finally the ministers have spoken up on the over-blown property market here. Super over-hyped. However, judging from the mad sentiments now, I wonder if it's too little done too late. Average selling price for property has shot through the roof, and many asking for insane prices. Even HDBs are affected. What happened to housing for the masses? I suspect that they are forced to react because of the recent sales of some of the HDB flats.

First of all, if you want insane prices, our average salaries for that property sector must be proportionally high in order to support this kind of prices. For example... If HDB 5-room flat is priced at $700k, that means the family with a combined gross housing income of less than $8000 must be forking out at least 35% of their combined gross income to pay for the mortgage.

Of course one might argue that its re-sale. I should not use the $8000 income rule. Why did I use it? Because the government did not build enough new flats to cater for the influx of people who are queuing up to buy flats. Just look at the recent queues at the HDB balloting. Fights even broke out. Therefore, resale flats have to be included in the calculation.

I wonder how many people know about the new ruling in investing multiple properties? This does not apply to those who are super rich of course. Excerpt from CPF:

Restriction on use of CPF Savings to Purchase Multiple Properties

Yes, you may use your CPF to purchase more than 1 property under the Residential Properties Scheme.

However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so after setting aside in your Ordinary and Special Accounts the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.


How to resolve this property issue? I can only think of one... For every property sale, it's mandatory to do a valuation, and the buyer must know about it. Valuator should not be any Tom, Dick or Harry. Either that, or they should increase all our overall salaries to reflect the property market here.

Since the civil servants have given themselves a raise, they should jolly well resolve this problem. Salary hikes need justification, and its not a given right!