30-5-2023 (SINGAPORE) According to a report released on Tuesday (May 30) by the Urban Land Institute (ULI) Asia Pacific Centre for Housing, Singapore holds the distinction of having the highest median price for private homes among cities in the Asia Pacific region, reaching US$1.2 million (S$1.6 million) in 2022. The report also reveals that Singapore ranks as the most expensive city in the region for renting a private home.
The ULI Asia Pacific Centre for Housing, a think tank dedicated to advancing best practices in residential development and addressing housing issues in the region, provided these findings.
In terms of affordability, the median price of a private home in Singapore stands at 13.7 times the median household income, while the ratio for median public Housing Board flats is 4.7. Consequently, Singapore is the second-most affordable city in the Asia Pacific region based on this measure, following closely behind Brisbane with a ratio of 4.5.
The report provides an overview of housing attainability across 45 cities in nine countries in the Asia Pacific, including Australia, China, India, Indonesia, Japan, the Philippines, Singapore, South Korea, and Vietnam.
Over the past year, Singapore witnessed an increase of over 8% in median prices for private-sector homes, while Hong Kong experienced an 8.7% decline in median home prices.
Several factors have contributed to the rise in prices in Singapore, including a significant influx of immigrants and a growing trend among young professionals to move out of their family homes in search of more space and independence. Additionally, reduced housing supply in recent years, caused by disruptions to the supply chain of building materials and labor due to the COVID-19 pandemic, has played a role in driving up prices.
In response to rising prices, the Singapore government has implemented a series of property cooling measures. The latest measures, introduced in April, include doubling the buyer’s tax for foreigners to 60%.
Hong Kong home prices
In contrast, home prices in Hong Kong have seen a substantial decline, returning to 2017 levels. The report attributes this trend to a decrease in population and rising mortgage interest rates.
The current median home price in Hong Kong stands at US$1.16 million, representing an 8.7% decrease from the previous year.
However, Hong Kong leads in terms of price per square meter. The median price per square meter in Hong Kong reaches US$19,768, almost double that of Singapore’s US$10,715. Singapore ranks third in this category, following Hong Kong and Shenzhen.
It is important to note that private homes constitute only about 20% of Singapore’s housing stock, with the majority being Housing and Development Board (HDB) flats.
Home ownership
Singapore maintains the highest rate of home ownership across both public and private housing, nearing 90%. The report attributes this to the consistent commitment of the Singapore government since the country’s independence in the 1960s, ensuring that its citizens can afford homes at reasonable prices.
The median price for HDB flats in Singapore has risen from US$379,000 to US$409,000, representing a 7.9% increase. The ratio of median HDB price to median annual income has also increased from 4.5 to 4.7, which is the second-lowest among the cities surveyed.
For private homes in Singapore, the ratio has surged to 13.7.
Shenzhen leads the list with a ratio of 35.0, followed by Ho Chi Minh City with 32.5. Hong Kong’s ratio has dropped significantly to 26.5, down from 30.5 in the previous year. The report suggests that home ownership is generally considered unaffordable when the ratio of median home price to median annual household income exceeds five. Based on this criterion, only Singapore’s HDB flats and apartment units in Melbourne and Brisbane are considered affordable.
Rental housing
Singapore also tops the list with the highest median monthly rent for private properties among the cities surveyed, reaching US$2,596. This figure represents an almost 30% increase from the previous year. The report attributes this surge to a sudden increase in the number of migrants, a slowdown in building completions, and a limited stock of rental properties, both institutional and individually owned.
Sydney ranks second with a median rent of US$1,958 for houses, while Hong Kong’s average monthly rent (median figure not provided) stands at US$1,686, slightly lower than the previous year.
In terms of affordability, the median rent for private homes in Singapore accounts for 35% of the household income. However, since most renters of private-sector homes have higher incomes than the median, the monthly rent amount is a significantly smaller percentage of their overall income, as highlighted in the report.
The report also notes that median monthly rents in Tokyo Ku (as opposed to the city’s suburban areas) and Seoul, at US$602 and US$689 respectively, are approximately a quarter of Singapore’s and around 35% of Hong Kong’s.
