Department of Economics

Faculty of Arts and Social Sciences


Singapore Centre for Applied and Policy Economics

Steering Committee
Working Papers
Newspaper Articles
Econometric Studies Unit
Housing Affordability in Singapore
Living Affordability in Singapore

Recent trends in Housing Accessibility and Affordability

Housing is accessible if the accessibility ratio <=1.0.
Housing is affordable if the affordability ratio <=0.3.
An upward trend of these ratios indicates deteriorating housing accessibility and affordability.

Charts below show the trends in housing accessibility and affordability over the quarters of 2011 and 2016Q1. For HDB housing median re-sale price and median household income are used in the computations. For private housing median price and household income at the 80th income percentile are used in the computations. Median house prices are taken from a list of regional prices. Note that some regions do not register any transaction in some quarters.

The graphs and computations across regions for different income deciles lead to the following general observations. (Some specific comments are inserted below the charts.)

(i) For young HDB re-sale home buyers the main problem with rising house prices is housing accessibility, not so much long-run affordability.  For example, a 4-room HDB re-sale flat in expensive areas is inaccessible to income groups below the 30th percentile. Even the 2-room and 3-room HDB apartments in low-priced areas like Yishun and Woodlands are inaccessible to low income groups below the 20th percentile. It should be noted that the estimated savings by age 29 for low income groups appear too optimistic. This means that the accessibility problem may be severe than what our estimates indicate.

(ii) Private residential properties are obviously meant for the very rich. Again accessibility is a more severe problem than long-run affordability.  Median priced private apartments and condos have become inaccessible even for those in the 80th income percentile group.

(iii) Rising mortgage rates obviously lower long-run housing affordability. Reduced housing affordability means reduced residual income for other living expenses.

Chart 1 shows that median priced HDB re-sale units are accessible to median income households
but accessibility in 2016Q1 was below the level observed at the beginning of 2011.

Chart 2 shows that since 2012 median priced private units have fallen outside the accessible range
even for the households in the 80th income percentile.

Charts 3 and 4 show that median priced HDB re-sale units are well within the long-run affordability range for the
median income group. Obviously rising mortgage rates will adversely affect affordability.

Charts 5 and 6 show that only the median priced private apartments and condos are within the long-run affordability range
for the households in the 80th income percentile group. They will be worse-off if the mortgage rates go up.


1.Since HDB has revised the resale procedures on 10 Mar 2014 to reduce the focus on Cash-Over-Valuation (COV) in negotiation, HDB ceased the publication of quarterly median COV by town and flat type from 1st Quarter 2014 onwards. Thus we use (10% of HDB valuation limit+3% transaction cost) as the upfront payment when calculating the HDB housing accessibility from 1st Quarter 2014.