Tuesday, April 26, 2011

PAP maintained high housing cost as policy

by Helluo Librorum

Dividing total population growth by residential unit growth (A+B) in the table (above), we get a ratio that is  the average number of new residents that must be housed in a new residential unit, if existing accommodation pattern (who live where) does not change in the course of a given year.

It indicates the scarcity of housing supply, relative to demand. The larger the number, the scarcer housing is.

In 2007, the ratio is an astonishing 88.64.  Assuming that there were no vacant units at the end of 2006, and no one living in Singapore at the end of 2006 moved house throughout 2007, then 88.64 people would have had to squeeze into each new unit completed in 2007.

Of course, that did not happen. Nevertheless, this ratio is a rough-and-ready indication of the housing supply and demand.

For the years 2005 to 2010, the ratios are 8.04,  25.49, 88.64, 23.12, 21.31, and 6.03.

For the entire six-year period, the population growth is 910000, and the residential unit growth is 52345. The ratio of the two is 17.385.

Except for 6.03 (in 2010), all the figures indicate an under supply of housing, and therefore a strong pressure for housing cost to rise. (On average, each household in Singapore has 3.5 persons [here]).

Both private and public residential supplies are closely monitored and managed by the government. 

It must therefore be the PAP's policy to under-supply housing, relative to demand, to drive up housing costs.

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