HDB’s Resale Price Index (RPI) rose by 4.1% in 2nd Quarter 2010 over the previous quarter, as compared to the increase of 2.8% in 1st Quarter 2010 and 3.9% in 4th Quarter 2009.
The median Cash-Over-Valuation (COV) amount amongst all resale transactions increased to $30,000 in 2nd Quarter 2010 (see Annex D (PDF 37KB)). The proportion of resale cases transacting above valuation also increased to 96%.
Singapore's HDB resale market is now out of reach of average Singaporeans. The median COV of $30,000 is now more than the annual take-home salary of an average Singaporean. Assuming that a person earning $3150 a month (gross) takes home $2500 a month (after CPF), this person would take 6 years to save up the median COV if he saved 20% of his income every month.
This means young, newly-wed Singaporeans who have been working for less than 5 years, and who are looking for housing when they are married, are effectively priced out of the resale market. The only way they would be able to afford the housing is if they were to borrow money from their parents to afford the COV to buy a resale flat.
