You won't believe how home price hike outstrips income growth

Low interest rates are masking the truth.

According to Nomura, low interest rates have kept housing “affordable” based on the monthly mortgage service (20-21% for HDB 4-room flats and mass-market private condos on our numbers).

However, if the effects of interest rates are removed, it appears household income growth has not caught up with the rise in home prices (the price-to-household income multiples for HDB 4-room flats and mass-market private condos = 5.9-6.4x, vs. the mid-cycle 5.1-6.2x, on our numbers).

Here's more from Nomura:

Anecdotally, it appears banks have also increased mortgage rates by c.10-20bps since the end of 2012. Assuming a mortgage rate of 3%, the mortgage service ratio would increase to 24-26% for HDB 4-room flats and mass-market private condos, vs. the current 20-21% and mid-cycle 20-25%, on our numbers.

The government’s concern is therefore not unfounded, in our view, considering 1) the fast rising leverage of the average households’ balance sheets, 2) higher home prices that has outpaced income growth, and 3) mortgage rates that are creeping up. More policy intervention is therefore on the table if the previous rounds of cooling measures prove to be ineffective in cooling the housing market.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia