Singapore private homes now priciest to own and rent in Asia-Pacific in absolute terms: Report

In absolute terms, the median price of Singapore’s private homes have overtaken those of Hong Kong. - ST FILE

SINGAPORE (The Straits Times/Asia News Network): Private residential property in Singapore is now the most expensive in the Asia-Pacific in terms of absolute prices, overtaking Hong Kong in 2022, according to a report released by the Urban Land Institute (ULI) on Tuesday (May 30).

ULI said the median price of Singapore’s private homes now stands at US$1.2 million (S$1.6 million), compared with Hong Kong at US$1.16 million. In the next highest market, Sydney single-family homes were a median US$980,000.

Singapore’s median private home prices rose about 8 per cent in 2022 whereas those in Hong Kong fell almost 9 per cent amid strict Covid-19 curbs, the report found.

On a per square metre (psm) basis though, Hong Kong is still the most costly private housing market in the region by far.

In 2022, the average psm price for a private home in Hong Kong was US$19,768, equivalent to US$1,836 per square foot (S$2,485 psf) - more than twice the median figures for cities such as Singapore, Tokyo Ku, Shenzhen, Beijing, and Shanghai.

In general, home ownership in Singapore is high at 90 per cent and is accessible due to the large supply of public housing, ULI noted.

“In contrast, other gateway cities such as Hong Kong, Shanghai, Tokyo, and Seoul have relatively low homeownership rates, reflecting high home prices and the more migratory nature of the populations in gateway cities,” it said.

But the affordability ratio of Singapore private homes now stands at 13.7, placing them in the unaffordable range, said ULI.

Homeownership is considered unaffordable when the ratio of the median home price to median annual household income exceeds 5. Across the cities tracked by ULI, median annual household income was highest in Singapore at US$87,900.

Shenzhen homes ranked least affordable with a ratio of about 35, while Hong Kong’s ratio fell to 26.5.

Data compiled by ULI showed also that the median price of a resale Housing and Development Board (HDB) flat rose 7.9 per cent from US$379,000 to US$409,000 (S$554,000) in 2022. With that, the affordability ratio of HDB resale flats has also crept up from 4.5 to 4.7.

Still, including public housing, Singapore housing is ranked “most attainable” in ULI’s 2023 Asia Pacific Home Attainability Index, with the median price of HDB resale flats at 4.7 times the median annual income.

“Meanwhile, home attainability is severely challenged in Tier 1 and leading Tier 2 cities in mainland China, Hong Kong, Metro Manila, Metro Cebu, Ho Chi Minh City, and Danang with median home prices at approximately 20 to 35 times median household income,” ULI said.

In rentals, Singapore’s private homes chalked up a median monthly rent of US$2,596, which is 53 per cent higher than Hong Kong’s median monthly rent of US$1,686 and overtaking other high cost-of-living cities like Tokyo (US$602) and Seoul (US$689).

This comes after Singapore’s median monthly rents increased by 29.7 per cent in 2022.

Factors such as construction delays, a sudden surge in the number of migrants and a relatively limited stock of institutionally or individually owned rental properties contributed to the rising market, said ULI.

The median monthly rent for private homes in Singapore represents 35 per cent of the overall median household income.

“However, as most renters of private-sector homes (in Singapore) have higher than median income, the monthly rent amount should be a significantly smaller percentage of the renter’s monthly income,” ULI noted.

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