By one measure at least, Thailand property and real estate is more unaffordable than Singapore.
Crowdsourcing data website numbeo.com, in its mid-year Index of countries around the world, lists Thailand property in seventh place in terms of price-to-income ratio – one measure of property affordability.
Venezuala topped this particular list (below) with a figure of 154.74, while Hong Kong (46.89) was more than double Thailand’s figure of 21.52.
Singapore was ranked in eighth position, just behind Thailand, with a figure of 21.18.
Numbeo.com said that its ‘Price to Income Ratio’ is the basic measure for apartment purchase affordability (and lower is better).
It is generally calculated as the ratio of median apartment prices to median familial disposable income, expressed as years of income (although variations are used also elsewhere).
Numbeo’s formula assumes and uses net disposable family income, as defined as 1.5 * the average net salary (50 percent is the assumed percentage of women in the workforce), a median apartment size of 90 sqm, and the price per sqm (that the formula uses) is the average price per sqm in the city centre and outside of the city centre.
Thailand is also ranked ahead of Singapore for ‘Mortgage as a percentage of Income’.
Numbeo defines this particular metric as a ratio of the actual monthly cost of a mortgage to take-home family income. The average monthly salary is used to estimate family income. It assumes 100 percent mortgage is taken for 20-years for a property in the city centre and outside of the city centre with an average price and measuring 90 sqm.
All its data is provided by users of the website, and thus provides an important indicator of on-the-ground experiences, although we suspect the data may relate more to non-Thais living in Thailand due to the website’s use of English.
Elsewhere, other Southeast Asian countries ranked lower than Thailand.
Vietnam was ranked in 9th place (20.07), the Philippines (10th, 19.45), Indonesia (24th, 13.84) and Malaysia (67th, 9.33).
So, why is Thailand property and real estate more unaffordable than Singapore, and also more than twice as unaffordable as the United Kingdom, Germany and the United States?
We believe the reason is a combination of relatively high prices here combined with relatively low incomes compared with elsewhere in the world.
Obviously, this is just one website and one measure of affordability, or otherwise, but when you take into account that Thailand was ranked 27th with a score of 18.19 just two years ago, it’s clear that by this measure at least, Thailand property and real estate is becoming more unaffordable.