Housing Prices Vs Household Income – Alternative ways of viewing the statistics

(This was first posted on Hazel’s blog http://hazelpoa.blogspot.com/ on 20 April 2010)

With reference to today’s Straits Times article where Mr Mah Bow Tan said it is not true that HDB resale prices have outstripped income growth.  He supported his statement with the following statistics: 

This is the data behind the graph:

I would like to point out that the choice of the base year can be very significant. Let’s see what happens when we change the base year to 2000:

Resale prices up by 45.6%, while median household income is up 21.3%. Choosing a suitable base year to support your conclusions is quite a useful trick that we should all learn.