HONG KONG, Jan 3 (Reuters Breakingviews) – Property is crashing everywhere, except in Singapore. The Asian city-state’s private residential prices are up 14% year-on-year, according to third-quarter data from Knight Frank. That’s a sharp contrast to major cities like Hong Kong and Sydney, which saw decreases of 7% and 4% respectively over the same period.
After years of dizzying growth, real estate in financial centres is getting hammered on the back of rising interest rates and fears of a global recession. Home prices in Hong Kong, the world’s least affordable property market by far, could fall by as much as 30% by the end of 2023 from 2021 levels, reckon analysts at Goldman Sachs.
Singapore is grappling with the opposite problem. The city-state boasts a home ownership rate of nearly 90% as of 2021, thanks to the government’s public housing policies. With average annual real wages growing almost 20% since 2017 and total employment expanding, many households are now looking to upgrade to private residences. Yet due to Covid-19 disruptions, net new housing has fallen below the 10-year average. As of the third quarter, 78% of planned private residential units were under construction, down from 90% in the same quarter in 2021, according to the Urban Redevelopment Authority.
The construction shortfall should ease. Demand, though, will remain robust: Foreign talent is steadily returning, as the city’s non-resident population nears pre-pandemic levels of 1.68 million. Moreover,