Singapore Homes Still Most Expensive in Asia, Tokyo New Condo Prices Jump 40%: ULI

Singapore’s private homes again ranked as the most expensive in Asia Pacific with a median price of $1.32 million in 2023, after an influx of wealthy immigrants helped push that figure up 9.6 percent from the previous year, according to the Urban Land Institute’s 2024 ULI Asia Pacific Home Attainability Index published Tuesday.

Homes in Hong Kong ranked as the second most expensive in the region with a median price of $1.16 million, followed by houses in Sydney, which crossed the $1 million median level last year to cost an average of $1.06 million, according to data compiled by the non-profit research institute. Houses in Melbourne ($695,913) and Brisbane ($590,265) rounded out the top five, while Shenzhen slipped to sixth place at $584,675.

“An increase in cross-border migration in the past few years has caused home price and rent to rise materially, worsening home attainability in cities experiencing significant inflows of financially well-to-do immigrants,” the report said, pointing to Singapore’s 2023 population growth of 5 percent, following a 3.4 percent increase the previous year.

The report, which compiles data on home prices, rents, and household income in 48 cities across 11 Asia Pacific jurisdictions, pointed to immigration as a key driver of housing price appreciation in gateway cities including Singapore, Sydney and Tokyo, with average prices of newly built condos in the Japanese capital having jumped nearly 40 percent from the previous year.

Shenzhen Least Affordable

On a per square metre basis, Hong Kong private housing remains the most expensive in the region at $18,331, which is 56 percent higher than the median figure for Singapore private homes ($11,749). Shenzhen ($10,142), central Tokyo ($8,240), Beijing ($9,118) and Shanghai ($8,228) rounded out the top six.

In contrast, cities in India have the lowest median home prices in the region on a price per square metre basis, ranging from $663 to $1,037, with the exception of Mumbai, where the median home price is $2,479 per square metre.

Comparing median home prices to annual household incomes, Shenzhen again ranked as the region’s least affordable market this year with a multiple of 32.3 times the median, followed by Beijing at 28.7 times, Ho Chi Minh City at 25.3 times, Hong Kong at 25.1 times and Metro Manila at 25.0 times. Those figures compare to 14.3 times for central Tokyo and 17.8 times for Seoul.

Despite remaining in the top five least affordable cities, Shenzhen and Hong Kong’s affordability eased from 40.7 times and 30.8 times the median annual household income respectively two years ago, reflecting declines in residential property values amid the protracted property slumps in both mainland China and Hong Kong.

“Mainland China’s housing sector has entered an uncertain period after continuous fast growth over the past three decades,” the report said. “Primary home sales volume in 2023 declined by 37 percent from the peak in 2021. For the first time in the past two decades, average selling price of primary homes recorded a year-on-year drop in the first quarter of 2024.”

Singapore’s HDB market, which represents over 80 percent of the city-state’s total housing stock, according to the ULI, continues to provide some of the most affordable housing in the region with a median price of 4.7 times median annual household income, with only condos in Brisbane offering a cheaper alternative at 3.9 times incomes.

For those leasing their abodes, Singapore’s private homes have the highest median monthly rent in the region at $2,897, outpacing Hong Kong’s $1,725 figure by 68 percent. Rents in Australian cities ranked behind Singapore, with Sydney houses having breached $2,000 last year at $2,108, followed by Sydney apartments ($1,963), Perth houses ($1,790), and Brisbane houses ($1,732).

Tokyo Rising

The biggest increases in home prices in the region came in central Tokyo’s 23 wards, with the average selling price of a new dwelling having jumped 39.4 percent year-on-year to JPY 115 million, while the average price per square metre increased 34.1 percent to JPY 1.73 million over the same period, according to the report. The ULI attributed the growth to higher net inflows of foreign residents, which more than doubled to 48,000 last year.

“Most of the growth has been driven by foreign migration into Tokyo,” Mari Kumagai, head of research and consulting at Cushman & Wakefield Japan said in a media briefing on the report. “The Japanese household migration hasn’t really changed – inflow has been positive before, during, and after Covid. What has changed is the foreign net migration inflow, which saw a dip during Covid, but is now returning.”

A weak yen has also helped drive interest in Japanese homes among foreign buyers, primarily from mainland China. Despite the appreciation in new home prices, the $800,000 median price of newly built condos in Tokyo remains lower than the median price of over $1 million for new condos in the urban cores of China’s tier one cities.

“One of the things that struck in this year’s report is the strong influence that foreign migrants have in the Japan market, in particular Tokyo, and much of that coming from China, despite the increase in prices,” Alan Beebe, chief executive of ULI Asia Pacific said in the briefing. “Relatively speaking, Tokyo remains affordable compared to cities such as Shenzhen, Beijing or Shanghai.”