The other and most important benefit of higher interest rates is that that forces capital into the MOST PRODUCTIVE investments, and reduces the tendency towards speculative investing. Pumping >80% of SG's capital and wealth into housing is incredibly stupid, short-sighted and damaging.
Define 80% of the capital and wealth in housing....source please
In the Pulses magazine published by The Business Times in May 2009, an article "Journey into uncharted territory" by Jason Wee, stated that they estimated average household wealth in Singapore stood at SG$780k. Assuming the average HDB flat is valued today at $480K and the average private property is valued at $1.25M, and assuming that the mix of HDB to private is 80:20 that means the average value of property in Singapore is around $634,000. That is slightly more than 80% of the wealth of SG households ($780K * 80% = $624K)
Sure, some assumptions, but it is essentially correct. This is a grossly inefficient and wasteful allocation of capital.
Kubes
Looks like you can't handle the simplest calculations. Let me help you out. Singapore's households have a total of S$1.131 trillion in assets, with total liabilities of S$171 billion. So, total wealth is S$960b.
Total household assets held in property is $536 billion, with less than S$140b in outstanding loans. So, total equity in property is S$396 billion. That's 35% of total household wealth held in property.
