Average property prices stand at US$874,372.
Despite the introduction of cooling measures meant to rein in the growth of property prices, Singapore still ranks as the second most expensive housing market in the world with average property prices of US$874,372 or US$1,036 on a per square foot basis, according to a report from CBRE.
In a show of regional dominance, the world’s three most expensive housing markets are all located in Asia. Home prices in Singapore look relatively tame compared to Hong Kong which still ranks as the most expensive housing market in the world where an average property costs a whopping US$1.24m or US$2,091 psf. Shanghai rounds out the top three with home prices of US$872,555 or US$714 psf.
It takes around 12 years for a skilled service worker in Singapore to be able to afford a 60 sqm (650 sqft) flat near the city center compared to the 16 years it would have taken the same worker to afford the same-sized flat in 2008, UBS said in a September report. Contrast this with Hong Kong where it takes a worker 22 years just to be able to afford a 650 sq ft home although the process took only 12 years a decade earlier.
In an attempt to rein in property prices which returned to growth in 2017, the government raised the Additional Buyers Stamp Duty (ABSD) rates by 5ppt for individuals and 10ppt for entities and tightened Loan-to-Value (LTV) limits by 5pt in a surprise announcement that caught the market off guard.
The punitive measures made some headway in curbing speculative demand. Overall house price growth slowed to 0.5% in Q3 2018 after a 3.4% recovery in the previous quarter, and 7.4% in H1 2018. This is compared to 2017 growth which was just 1.1%.
“As a result, price growth has declined for the second straight quarter in Q1 2019 after five consecutive quarters of strong growth since Q3 2017. Coupled with increasing supply and weaker sentiments, prices are likely to moderate or remain flat from this year going forward,” Desmond Sim, Head of Research, Southeast Asia said in a statement.
The cooling measures have also hit demand in the new build sector as new supply currently outstrips demand despite a 21% fall in construction completions in 2017.
Singapore's housing market is still deemed 'fairly valued,' according to the UBS report, as overall house prices have stayed in the same level since 2012 unlike world cities Hong Kong, Munich, Toronto, Vancouver, Amsterdam and London whose residential markets are all in bubble risk territory.
Do you know more about this story? Contact us anonymously through this link.