Seriously, Singapore houses are still cheap

Quit complaining: housing affordability is at 36% compared to more than 60% during the Asian financial crisis.

Houshold affordability is based on the average disposable income level measured as the ratio of
monthly mortgage payment to household disposable income,

According to UOB Kay Hian, the 36% level is comfortable compared with the long-term level of 48% and the stretched level of 60-70% in 1996-97.

Although median prices of condos have surpassed the peak levels, UOB said that affordability is still at comfortable levels predominantly due to the extremely low interest rate environment and strong growth in median income in 2011 (+11%).

"SIBOR rates in Singapore are at an historical low of 0.39% compared with the 15-year average of 2.2% and peak levels of 6-7% during the Asian financial crisis (AFC). With interest rates likely to remain low till end-14, we believe affordability levels are unlikely to creep above alarming levels," it said.