Singapore has successfully stemmed in property costs and prices, resulting in more affordable housing.
In a comparison between the property markets of Singapore and Hong Kong, two of Asia’s financial hubs which have been struggling with rising housing costs in the past years, Singapore’s interventions to rein in property costs have significantly performed better than that of Hong Kong’s.
In terms of overall affordability, Singapore is ranked 27th, a rank that it has kept steady in recent years. In contrast, urban planning researcher Demographia reported Hong Kong to have had the least affordable housing in the course of 11 years of surveys in large urban markets.
It also takes at least 19 years for a family with a median household to buy a home in Hong Kong compared to the estimated 5 years in Singapore.
Singapore’s success with affordable housing is attributed to its public housing model program. Home programs under the Housing Board accounted for 80% of all housing initiatives in the market last year.
“The fundamental difference between the two property markets is that in Singapore, there is a big public sector,” said Reynold Yeung, chief economist at Australia and New Zealand Banking Group.
Public housing in Hong Kong accounts for only 21% of total home ownership, and residents wishing to obtain a government housing unit are put on an average waiting list of three years.
Moreover, Hong Kong has a shortage of land supply given its higher population density and its strict regulations on land use. Only 25% of Hong Kong’s land have been developed, and despite a 6.3% dip in September last year, home prices hold steady at a steep 35%.
The Hong Kong property market, however, remains resilient with home sales rebounding last month following a 25-year low in February. Property experts attribute Hong Kong’s resilience to a renewed interest from mainland China which also contend with rising property prices in areas such as Shanghai and Shenzhen.