Singapore?has overtaken Hong Kong as the?most expensive city in the Asia-Pacific region for private homes for both?rent and purchase. The median price of Singapore¡¯s private homes was $1.2 million (Rs?9.87 crore?per square metre)?in 2022, compared to Hong Kong¡¯s $1.16 million, said a new?report?by global nonprofit research and education organisation Urban Land Institute (ULI). The report also mentioned Indian cities.
Among the eight cities studied in India, Mumbai has the highest median home price per square metre of $3,383 (Rs 2,78,466), with Delhi NCR trailing far behind at $1,358 (Rs 1,11,781). Compared to other developing countries, India¡¯s housing price is relatively inexpensive compared to the median household income, the report said, as per Moneycontrol.
ULI¡¯s report, 2023 Asia Pacific Home Attainability Index, provides a snapshot of the extent to which housing is attainable in cities in the region.
Rents in the city-state were also the region¡¯s highest, the report said. Private rental homes in Singapore also had the highest monthly rent in the region at $2,600, ¡°far exceeding¡± other cities such as Sydney, Melbourne, and Hong Kong, according to the report.
The study covered 45 cities in nine countries, namely, Australia, China, India, Indonesia, Japan, the Philippines, Singapore, South Korea, and Vietnam, with a combined population of 3.5 billion, or around 45 percent of the world¡¯s total population, measuring home attainability for both home ownership and home rentals in relation to the median income of households.
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The key reasons for the sharp increase in home prices and rent in Singapore were a large influx of immigrants into the city-state, a growing trend of young professionals moving out of their multi-generational family homes for more space and freedom, and the government¡¯s new measure that requires homeowners to serve a 15-month wait-out period after the disposal of their private properties before they are eligible to buy a non-subsidised Housing Development Board (HDB) resale flat.
A relatively limited stock of institutionally or individually owned rental properties and a reduced new supply of housing in the past few years due to the disruptions in the supply chain of building materials and labour due to Covid-19, also big contributory factors, said the report.
As per the report, homeownership in Singapore varies significantly and is often a function of government policies and population migration.?Singapore continues to have the highest homeownership rate at nearly 90 percent. 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 these cities.
Some key findings from the report:
Australia: Home prices have declined in Australia¡¯s top two cities, Sydney and Melbourne. COVID-19 has caused a migration of people from Sydney to smaller regional cities, with people looking for more space; this has created a housing shortage in the regional cities, worsening home attainability for existing residents.
Tier 1 and 2 cities in the mainlandChina: Similar to last year¡¯s findings, mainland Chinese cities rank among the lowest in terms of home attainability. Home prices are closely tied to new housing supply and population increases.
Hong Kong SAR: Home prices dropped substantially in 2022, returning to 2017 prices, mainly caused by a drop in population and a rising mortgage interest rate. India: Among the eight cities studied in India, Mumbai has the highest median home price per square metre of US$3,383, with Delhi NCR trailing far behind at US$1,358. Compared to other developing countries, India¡¯s housing prices are relatively inexpensive compared to the median household income.
Indonesia:?Jakarta¡¯s housing stock is predominantly landed homes, which contributes to urban sprawl and heavy traffic congestion and exacerbates the rate of soil subsidence as most landed homes rely on groundwater.
Japan: The median monthly rent of Japanese cities relative to median household income is the lowest among all the cities in the report. The median monthly rent ranges from US$350 in Osaka to US$602 in Tokyo. This is due to a relatively large pool of available housing for rent resulting from an ageing population and limited new household formation.
Philippines: While Metro Manila allows a high FAR (floor-to-area ratio) of 16 or even higher, it suffers from limited housing stock and poor urban transportation infrastructure for a fast-expanding number of young professionals. The government has recently embarked on an ambitious campaign to build 1 million homes per year for the next five years.
South Korea: A recent home price drop has created problems for ¡®Jeonse¡¯, a unique form of home rental in South Korea where tenants put up a lump sum deposit of as much as 70¨C80% upfront instead of paying monthly rent during the lease period. With declining housing prices in recent months, a growing number of ¡®jeonse¡¯ landlords have been unable to return deposits to renters at lease expiration.
Vietnam: Homes in Ho Chi Minh City are the second least affordable, at 32.5 times the median household monthly income. Many home buyers are speculative investors who own multiple units, further driving up house prices.
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