Singapore’s Keppel Bay Yacht Marina area offers breathtaking views of modern and luxury smart homes, showcasing the city’s architectural prowess. In a recent report, the Urban Land Institute (ULI) Asia Pacific Centre for Housing revealed that Singapore’s private homes have surpassed Hong Kong as the most expensive in the Asia-Pacific region. The median price of a private home in Singapore in 2022 was $1.2 million, compared to Hong Kong’s $1.16 million.
Additionally, private rental homes in Singapore also command the highest monthly rent in the region, averaging at $2,600. This figure far exceeds rental prices in cities like Sydney, Melbourne, and Hong Kong. The report, which analyzed data from 45 cities in nine markets, examined home affordability by considering the median income of households in relation to home ownership and rental costs.
Hong Kong, on the other hand, experienced a substantial drop in home prices in 2022. This decline was mainly attributed to the significant increase in mortgage interest rates, driven by Hong Kong’s synchronization with the U.S. Federal Reserve. As a result, Hong Kong’s median home price plummeted by 8.7% from $1.27 million in 2021 to approximately $1.16 million in 2022. Meanwhile, Singapore’s private homes saw an increase of over 8% in median price during the same period, solidifying its position as the most expensive in the region.
To address concerns of soaring property prices outpacing economic fundamentals, Singapore recently implemented tax hikes on property purchases. These cooling measures aim to stabilize the market and discourage speculative investments. However, on a per square meter basis, Hong Kong still holds the title for the most expensive private homes, with prices exceeding twice those of Singapore, Shenzhen, and Beijing.
Rentals in Singapore have also experienced a significant surge, with an almost 30% increase in 2022. Several factors contributed to this upward trend, including a rise in migrants, limited completion of new buildings, and young professionals seeking more spacious and independent living arrangements.
While Sydney and Melbourne witnessed a decline in private home prices due to population migration to regional areas and multiple interest rate hikes, the median monthly rent for houses and apartments in these cities increased. Sydney’s house rentals reached an average of $1,958 per month, while apartment rentals averaged at $1,732 per month.
Despite Singapore’s private homes being the most expensive in the region, the city-state boasts the highest homeownership rate at 89.3%. This feat is accomplished even with a 7.9% increase in median HDB prices from 2021 to 2022. The ratio of median HDB price to median annual income also rose from 4.5 to 4.7. For private homes in Singapore, this ratio stands at 13.7. The report notes that only HDB units in Singapore and apartment units in Melbourne and Brisbane, Australia, are considered affordable when the ratio of median home price to median annual household income is below five.
Chinese cities rank low in terms of home attainability, with mainland China experiencing a substantial decline in homeownership rate over the past decade. The report attributes this decline to a lack of new housing supply relative to the increase in population. Shenzhen, in particular, witnessed a population increase of over 7 million between 2010 and 2022. However, its new housing stock only increased by 31 million square meters, the smallest increase among Chinese cities during the same period.
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