Yes our statistics department has spoken and given us more good news that even the bottome 20% of Singaporeans have net equity of $138K in HDB flats - wow!...Our statistics department is always able to illustrate that our govt has yet again achieved the extraordinary.
To show how super-duper this achievement is I dug out even more statistics, the bottom 20% of the household make $1175 per month. 12% of household make less than $1000 per month. Now see how incredible our govt's achievement is? Say, one of these low income folks set aside 40% of his $1000 to pay HDB every month and live on $600, that is $400 per month, a typical loan of average HDB loan of $150,000 at 2% interest will take 40+ years to finish paying. Just a single govt organisation called HDB is able to absorb away 40% of the income of the lowest 20% of households for 40+ years. I believe no other country in the world can match this. I read somewhere that these subsidized HDB flats cost about $45,000 to construct....incredible, I don't believe any other country's govt is able to sell public housing at more than triple the cost of construction. HDB achievements are just amazing.
Poor – and worth $100,000
Most Singaporeans are well off in terms of asset value, SingStat survey indicates
Tuesday • October 11, 2005
Tor Ching Li
MOST Singaporeans live in Housing Development Board (HDB) flats that they own and most such properties are valued at a six-figure sum. Therefore most Singaporeans are well off, asset-wise. True? Almost.
In a detailed breakdown released by the Singapore Department of Statistics (SingStat) yesterday, it became clear that those considered poor in Singapore are still in possession of significant wealth, as Prime Minister Lee Hsien Loong pointed out in his National Day Rally speech.
Referring to the household equity of the poorest 20 per cent in terms of per capita household income, Mr Lee had said: "That means the value of the house, subtract the mortgage not paid, this is what it is worth to him. So it's not bad for the bottom one-fifth to have $138,000 of wealth in an HDB house."
More details came out yesterday to back that point. Some 71 per cent of the lowest 20 per cent households, per capita, had equity of at least $100,000 in their HDB flats while 7.8 per cent of this lowest income group had equity exceeding $250,000 in their property.
HDB home ownership was high across all income groups, at an estimated 87 per cent among the lowest 20 per cent, 95 per cent for the middle 60 per cent and 92 per cent for the top 20 per cent.
Contrary to expectations, most households in the lowest 20 per cent owned four-room flats — or 39.4 per cent of the households.
About 34.5 per cent of these "poor" households owned three-room flats while 12.8 per cent owned five-room flats. Of the 13.1 per cent staying in one- or two-room flats, 10.8 per cent rented as tenants.
Mr Nizam Idris, deputy head of research at IDEAglobal, pointed out that most lower-income households would need larger flats simply because they tend to have more children.
"This also means that the per capita asset will actually be quite small. Even if there are only four people in the households, two adults and two children, that amounts to around $34,500 in assets per capita."
Mr Idris also pointed out: "While the data shows that the outstanding loans of homeowners do not exceed the value of the asset, these assets are not very liquid. It is better to have assets than not to have any, but lower income families wouldn't sell the roof over their heads. And jobs would still be their immediate concern."
For Singaporeans, some 47 per cent of total assets in the household sector were invested in residential properties.
According to data from the Household Expenditure Survey 2003, the annual household income of the bottom 20 per cent is $14,100 — or $1,175 a month.
Their home equity is 90 per cent of the national average of $154,000.
But GK Goh economist Song Seng Woon said: "A broad spread of HDB home equity is not a social leveller. The difference comes in the higher disposable income of those in the higher income groups. It's similar to Singapore having the highest savings rate in the world, but due to forced savings in our CPF."
The valuations used by the SingStat survey are based on information posted on HDB's website for the purpose of reference for mortgage financing by the HDB.