The world class government finally gets why the housing prices are going up!


	Number of HDB flats		Total Population		Resident Population
2003	874,183		4114.8		3366.9
2004	876,985	0.3%	4166.7	1.3%	3413.3	1.4%
2005	877,546	0.1%	4265.8	2.4%	3467.8	1.6%
2006	878,820	0.1%	4401.4	3.2%	3525.9	1.7%
2007	883,448	0.5%	4588.6	4.3%	3583.1	1.6%
2008	884,920	0.2%	4839.4	5.5%	3642.7	1.7%

I took this of Mr Tan Kin Lian’s site and while it doesn’t tell everything it does tell alot.

I remember talking to a Walton Landbanking Consultant who happens to be my friend and he told me why landbanking works because, its not really whether it gets develop or not, but when the population increases, you really need more housing and the demand for that will enable land price appreciation.

That is the same situation here. From the above table, its clear that since 2003 the number of HDB flat have been stagnating but the total population have ballooned from 4114 to 4839, nearly a 17% increase.

Now all else equal, if no of flats remain the same and population increase, what happens to the price?

Speaking to MediaCorp, National Development Minister Mah Bow Tan acknowledged it has been an exceptional period.

He said: “Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard… I did not expect the prices to go up. But the point is, are we able to respond to this change. And the answer is yes.”

Fears of a property bubble forming saw the government introducing measures such as removing easy financing schemes to cool the private homes sector. The measures included removing the interest absorption scheme and interest only loan to temper the exuberance of the market.

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Kyith

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