Singapore overtakes Hong Kong as most costly APAC city for private homes

Trendy and luxurious sensible properties in Singapore, seen from above throughout a sizzling summer season day on the Keppel Bay Yacht Marina space within the metropolis centre.

Tobiasjo | E+ | Getty Pictures

Singapore’s non-public properties at the moment are the most costly in Asia-Pacific, having overtaken Hong Kong, based on a brand new report.

Knowledge from the House Attainability Index from the City Land Institute (ULI) Asia Pacific Centre for Housing confirmed the median worth of Singapore’s non-public properties was $1.2 million in 2022, in comparison with Hong Kong’s $1.16 million.

Non-public rental properties in Singapore additionally had the very best month-to-month hire within the area at $2,600 — “far exceeding” different cities resembling Sydney, Melbourne and Hong Kong, based on the report. 

The report drew on authorities statistics from 45 cities in 9 markets in Asia-Pacific — whereas measuring house attainability for each house possession and residential leases in relation to the median earnings of households.

Hong Kong vs. Singapore

House costs in Hong Kong “dropped considerably” in 2022, ULI mentioned, citing the numerous enhance in mortgage rates of interest as Hong Kong retains tempo with the U.S. Federal Reserve.

In October, Hong Kong’s house costs plunged to a five-year low as rate of interest hikes pushed up borrowing prices. 

Earlier this month, Hong Kong’s financial authority raised the bottom rate of interest to five.5%, after the U.S. central financial institution hiked the fed funds price to five% to five.25%. 

The ULI report mentioned “a web outflow of inhabitants” and “much less optimistic view” on the native property market additionally introduced Hong Kong’s median house worth down by 8.7% — from 2021’s $1.27 million to about $1.16 million in 2022. 

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In the meantime, Singapore’s non-public properties overtook Hong Kong’s as the most costly in Asia-Pacific, with the median worth rising over 8% up to now 12 months, mentioned the report.

Simply final month, Singapore raised taxes for property purchases amid issues that surging costs “may run forward of financial fundamentals.”

Costliest cities for personal properties in Asia-Pacific

Metropolis Median housing worth per unit
Singapore $1,200,087
Hong Kong $1,155,760
Sydney $980,209
Melbourne $716,200
Shenzhen $626,964

Supply: City Land Institute Asia Pacific Centre for Housing

In a brand new spherical of cooling measures, the Singapore authorities mentioned native and overseas consumers of residential properties should pay larger taxes, recognized domestically as further consumers’ stamp duties. 

Nevertheless, the report added that Hong Kong’s non-public properties are nonetheless the most costly on a per sq. meter foundation — costing $19,768 and “nicely over twice” the median figures for Singapore, Shenzhen and Beijing. 

Rental costs 

Singapore’s non-public rental properties have the very best month-to-month hire within the area, having elevated by almost 30% in 2022. 

ULI attributed the rise in hire and residential costs to varied components resembling a rise in migrants, a slowdown in constructing completion and younger professionals shifting out of their multi-generational household properties for more room and freedom. 

Costliest cities for personal rental in Asia-Pacific

Metropolis Median month-to-month hire per unit
Singapore $2,596
Sydney homes $1,958
Sydney flats $1,732
Hong Kong $1,686
Brisbane homes $1,657

Supply: City Land Institute Asia Pacific Centre for Housing

Non-public house costs noticed a decline in Sydney and Melbourne as extra individuals moved again to regional cities and an “unprecedented” 11 rate of interest hikes in 12 months, the report added.

However homes and flats throughout Sydney, Melbourne and Brisbane noticed a rise within the median month-to-month hire.

Sydney’s home leases price a month-to-month common of $1,958 whereas condo leases have been at $1,732.

“There was a reversal of inhabitants motion again to capital cities for the reason that finish of Covid-19 in 2022. This was probably one of many causes for the rise in median hire within the nation,” David Faulkner, ULI’s president for Asia-Pacific instructed CNBC.

House attainability

Regardless of Singapore’s non-public properties being the most costly within the area, town state additionally has the very best homeownership price at 89.3%. 

That is regardless of a 7.9% enhance of median HDB costs from 2021 to 2022, with the ratio of median HDB worth to median annual earnings additionally rising from 4.5 to 4.7. HDB, or the Housing Growth Board, is Singapore’s public housing authority.

For personal properties in Singapore, the ratio is 13.7. 

How rent control policies affect housing affordability

“Basically, homeownership is taken into account unaffordable when the ratio of the median house worth to median annual family earnings exceeds 5,” mentioned the report. 

“By this customary, solely Singapore’s Housing Growth Board (HDB) items and condo items in Melbourne and Brisbane, Australia, are thought of inexpensive.” 

The place properties are most unaffordable in Asia-Pacific

Metropolis Median house worth to median annual family earnings ratio
Shenzhen, China 35
Ho Chi Minh, Vietnam 32.5
Beijing, China 29.3
Da Nang, Vietnam 26.7
Hong Kong, China 26.5

Supply: City Land Institute Asia Pacific Centre for Housing

Just like final 12 months’s index, mainland Chinese language cities have among the many lowest ranks when it comes to house attainability. 

The report famous that the homeownership price in China has “declined considerably” up to now 10 years.

“The cities’ house attainability is straight tied to the quantity of recent housing provide relative to extend in inhabitants,” it added. 

“For Shenzhen, its inhabitants elevated by greater than 7 million within the 12-year interval from 2010 to 2022 … but its new housing inventory elevated by solely 31 million sq. meters, the smallest enhance [among Chinese cities] throughout the identical interval.”

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