SINGAPORE: Singapore private homes remain the most expensive in the Asia-Pacific region for the second consecutive year, according to a recent report by the Urban Land Institute (ULI).
Released on May 21, the report highlights the continuing trend of high property prices in Singapore compared to 47 other cities across 11 countries.
The Straits Times reported that the ULI report revealed the median price for Singapore private homes reached US$1.30 million (approx. S$1.75 million) in 2023.
This figure places Singapore at the top of the list, surpassing Hong Kong, where the average home price stood at US$1.15 million (approx. S$1.55 million).
Sydney followed closely with a median home price of US$1.06 million (approx. S$1.43 million).
Singapore HDB flats as “most attainable”
Despite the high prices for private housing, the report commended Singapore’s public housing system and noted that it is the “most attainable” form of home ownership.
The country boasts an impressive homeownership rate of nearly 90%.
The affordability of housing is often measured by the price-to-income ratio, which compares the median home price to the median annual household income. A ratio below 5 is generally considered affordable.
In Singapore, the median price of Housing Board (HDB) flats, which make up 90% of the country’s housing stock, has a ratio of 4.7. This suggests that HDB flats remain relatively affordable for the average Singaporean.
2023 Singapore private home prices increased by 7%
In 2023, private home prices in Singapore increased 7% despite the implementation of property cooling measures in April. These measures included higher additional buyer’s stamp duty (ABSD) rates and tighter loan-to-value ratios.
The report noted that these measures led to a significant drop in foreign demand, with the ABSD rate for foreigners doubling from 30% to 60%, resulting in a 20% decrease in total home sales.
When comparing prices per square metre, Hong Kong was the region’s most expensive private housing market, with an average price of US$18,331 (approx. S$24,693) per square metre.
Singapore followed with a median price of US$11,749 (approx. S$15,827) per square metre, while Shenzhen in China came in third at US$10,142 (approx. S$13,662) per square metre.
Homes in Shenzhen had the highest price-to-income ratio at 32.3, indicating extreme unaffordability, followed by Beijing at 28.7.
Other cities, such as Metro Manila, Ho Chi Minh City, and Hong Kong, had ratios of around 25. In contrast, the ratio for private homes in Singapore was 13.5.
Singapore also topped the median annual household income list among the cities tracked by ULI, with an impressive US$97,124 (approx. S$130,834).
The median price of an HDB flat increased from US$409,000 (approx. S$550,956) in 2022 to US$461,289 (approx. S$621,393) in 2023.
Renting is “significantly more affordable” than buying
The report also highlighted that renting is “significantly more affordable” than buying in the region.
In Tokyo, for example, where the price-to-income ratio for buying is 14.3, the median monthly rent is only 20% of the median monthly household income.
This trend is similar in mainland Chinese cities like Chongqing and Tianjin, where the ratio is below 30%. In comparison, the ratio for renting private homes in Singapore is 36%.
Notably, Singapore had the highest median monthly rent for two-bedroom private apartments at US$2,897 (approx. S$3,902), outpacing Hong Kong (US$1,725 or approx. S$2,324), Tokyo (US$613 or approx. S$826), and Seoul (US$677 or approx. S$912).
Interestingly, the report also discussed the Singapore Government’s initiative to pilot long-stay serviced apartments, a departure from its traditional focus on home ownership.
This decision was influenced by the Urban Redevelopment Authority’s assessment of the demand for long-term rental housing, particularly among young professionals, students, and transitional families.
The ULI report also noted similar rental housing initiatives in China, Australia, and Bangkok, indicating a regional trend towards catering to the rental market amidst soaring property prices. /TISG
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