Recently I chanced upon this publication: Singapore in figures 2018, compiled by Statistics Singapore.
Inside this publication, there are many interesting facts and figures about Singapore population, housing, trade etc. You can find out more information of this publication from www.singstat.gov.sg.
I have extracted some of the key segments from this publication, which I think is interesting to take a look at, to gain more understanding on the real estate market.
Our Population Density?
From the report, we have around 7,800 people per sq km. Then numbers has decreased very minimal from 2016 to 2017. Probably you will still feel quite the same squeeze on this island.
How about the size of our land?
Yes, we have more land going from 2016 to 2017. Perhaps due to reclamation. But just slightly.
Total population wise, we have around 5.6M. Rounding off, 2016 and 2017 population numbers are about the same. Some of us may say that the population is increasing rapidly, this is not true from 2016 to 2017.
However, the number of Singapore residents increased over 2016 to 2017. We have more people here who are looking at staying in Singapore in the long term.
Why are these number important?
This is because residential real estate demand can derive from population growth. With more population or people in the country, the people will either have to buy or rent a house in the country. An increase in total population may indicate a need for more houses.
With more Singapore residents, the increase in the residents numbers may translate into more number of people who are buying into a home for own stay. Looking at these figure, I will think that perhaps more buyers will be looking to buy a house while rentals market may continue to be soft.
However home ownership among resident households has dropped very marginal from 2016 to 2017 and may not be very conclusive.
Let’s continue to monitor this figure to see how the future trend will be like.
Looking at the median age of residents, here we can see that we do have an ageing population. It is important to take a look at this figure to determine the future profile of home owners; as a young buyer’s needs will be vastly different from a retiree needs.
For example a young buyer may buy a home for own stay and setting up a family. Getting older, he may accumulate enough for an investment into another property. Upon retirement, he may intend to sell off or downgrade the property for retirement purposes or thinking of how to pass on his property to the next generation.
Looking at the total population growth rate over the years, the growth has definitely slowed down over the years.
However the resident population growth rate has been constant over the last few years. Being resident population growth, we may expect some of the residents to pick up a property for own stay.
Income from work
Income is one of the most important factors in determining the affordability of the residents. Generally, with more income, the affordability of the residents will higher.
Looking at the 50% percentile of gross monthly income from work and applying the TDSR, the loan a person at age 40 can qualify is estimated to be (25years loan tenure) $507,206 (assuming not other debt liabilities). For a couple with similar income and age, the total loan for the couple will be $1,014,414. Based on the most recent measures of loan to value of 75%, the couple could possibly afford a $1,352,552 property (with 25% downpayment).
By observing the trend, residents generally have increased in their income over the years, therefore they are able to afford higher property price purchases.
How about Residential Property Supply? Is there a lot of supply?
Comparing with 2012 figures of building commencement with 2017, the 2017 number is much lower. Similarly by comparing at the supply of private residential properties over the same period is 2017 numbers is also much lower.
Knowing the numbers do helps
The numbers presented in this article is just part of many other numbers that you can look at to understand the real estate market and how the price trend will be expected to be heading. If you want to understand and gain more knowledge about this topic, you can either subscribe to my ebook or sign up for our upcoming seminar.
If you are a number geek like me, Residential Property Price Index is another data that can help you to gain better understanding of the property market in Singapore. I have written an article about it and you can find it here.