It did not come as a surprise that the median monthly salary of graduate for 2017 was $3,400 up from $3,300 in 2016. Why am I not surprised?
I see a correlation between property prices and salary of graduates. As property price increases, how can a fresh graduate afford to own one if his salary stagnates?
When I graduated in 1981, my starting salary was $950 per month with honours degree. Now a NTU Accountancy honours graduate earns $3,000 gross per month. The HUDC unit I stayed cost me $170,000 ($110 per square feet). Now an Executive Condominium costs an average $700 to $800 per square feet. Based on same floor area (1,500 square feet), the EC costs $1,050,000 to $1,200,000!
The ratio of Property Price to Starting Salary in 1981 was 178. Now the ratio is 350, nearly two times increase some 37 years later.
With current starting salaries of graduates, it is tough to own a private or semi-private property. The aspiration is getting harder to fulfil as the years go by. The realistic option is to own a flat from HDB. In land scarce Singapore and cost of modern living going up, naturally salary of graduates and workers have to go up to catch up.
© 2018, Lim Kim Tong for Living Investment