TR Emeritus
25 September 2013
Fulfil younger voters’ aspirations?
I refer to the article “Ruling parties have to fulfil aspirations of younger voters: PM Lee” (Straits Times, Sep 21).
It states that “The loss of popular support for ruling parties that have governed for decades in Singapore and Malaysia must be met by new leaders who can fulfil younger voters’ aspirations”.
How to measure aspirations?
So, how do the general population (younger voters or otherwise) tell whether their aspirations have or are going to be met?
Well, arguably, it may be from their perception from reading media reports about their aspirations. In this regard, for the purpose of using an example to illustrate the issue that I am trying to present to you – perhaps the most common and greatest aspiration may arguably be the affordability of HDB flats in which about 83 per cent of Singaporeans live in. And also because, It is also likely to be the biggest asset purchase in one’s life.
HDB COV?
In this connection, I would like to refer to the articles “Resale flats’ median COV at 4-year low” and “Soft landing for HDB resale market” (Straits Times, Sep 21).
The former states that “Overall median cash premiums for resale flats dropped $2,000 to $18,000 last month. This was the lowest since July 2009, when the median cash-over-valuation (COV) was $10,000, according to Singapore Real Estate Exchange estimates released on Friday.
Median premiums have halved since they peaked at $35,000 in January.”
After reading these two articles, I think practically almost everyone may come to the conclusion that COV has dropped a lot.
No more median COV because “misleading”?
Allow me to share with you a story about COV in Singapore. For more than a decade, people relied on the HDB’s median COV statistics.
However, after the last general elections in 2011, the new Minister announced that the median COV would no be published anymore, because it would be misleading to Singaporeans.
I shall not dwell into the ludicrosity of such a move.
Not the same COV?
So, now, media reports often cite the COV statistics from the Singapore Real Estate Index (SRX).
According to media reports in August, the overall COV in June was about $24,000.
Since the HDB no longer publishes the median COV, there is no way to make a comparison as to what the HDB’s median COV would be, relative to the SRX’s median COV.
This is an important distinction because if we are to really know whether our aspirations are being met – in this case, the COV, how can we ever tell whether things have improved and by how much when we can no longer do a apple-to-apple of the benchmark statistics now against the past?
3 and 4-room COV?
Anyway, I manually calculated the various available towns’ median COV available from the HDB’s web site for June (the end of the second quarter) – and derived the average of the available median COVs for 3 and 4-room flats to be about $23,200 and $34,600, respectively.
I have used the data for 3 and 4-room because, arguably, affordability may be more crucial for the types of flats that most lower and middle Singaporeans aspire to buy.
So, if we take a step back and relook the SRX COV of $24,000 in June and compare it to the $23,200 (3-room) and $34,600 (4-room) which I computed above – your perception of how much the COV has dropped may be quite different.
In fact, the article also said “But executive flats in popular estates like Bishan and Queenstown still commanded high premiums. The highest COV was for Bishan flats, which fetched a median premium of $120,000”.
Reading the above may give most people the impression that its the bigger flats that have high COVs, given the $102,000 difference between the $120,000 “high COV” and the $18,000 median COV last month, cited in the media article.
4-room COV higher than perceived?
To put it to you in another way – are you not surprised that a closer examination of the data tells us that the median COV for 4-room (derived from HDB data) at $34,600 is so much higher than the SRX’s $24,000 (all flats) in June? In fact, it is almost the same as the $35,000 COV peak in January.
3-room COV almost the same as the median COV?
In other words, when you read media reports that may give you the impression that the bigger flats may be the main culprits for the high COVs – you may never imagine that the 3-room COV (derived from HDB data) at about $23,200 is about the same as the SRX’s overall COV of $24,000 in June too.
HDB should start to publish median COV again?
Why don’t the HDB just start to publish the median COV statistics again? Only in so doing, will Singaporeans be able to make meaningful comparisons as to the extent of the drop in COV, using the same historical benchmark.
Statistical consistency, press freedom?
And therefore it may be so important for statistics to be broken down, be consistent in data collection and methodology (HDB’s past median COV is different from the SRX’s COV), and perhaps even more importantly – for our press freedom ranking of 149th (lowest ever) to improve.
Otherwise, we may be none the wiser as to whether and to what extent our “aspirations” are being met or not.
Using the same ruler to measure “aspirations”?
I shall not confuse you further by going into further examples of “aspirations” statistics, such as how our jobs and wage statistics may have also changed in definition, presentation or availability – such that it may also be quite difficult to try to figure out whether our “aspirations” are being met now or in the future.
“If the ruler that you use to measure is a different one – how do you know that what you are measuring is actually longer or shorter?”
Leong Sze Hian
