Despite the impact of economic conditions and government cooling measures, Singapore’s property market recorded the hottest pace of year-on-year price growth in the second half of 2023. This work sheds light on the forces at work in a city that is increasingly famous as a wealth management hub.
Singapore recorded the fastest annual house price growth among 25 Asia-Pacific markets in the second half of 2023, boosted by a growing affluent population and signs of a peak in international interest rates, Knight Frank said.
The real estate consultancy firm has released the Asia-Pacific Housing Valuation Index for the second half of 2023, announcing that 21 out of 25 cities recorded positive annual price growth in the second half of 2023. Singapore’s numbers jumped 13.7% year-on-year. Prices rose 4.5% across all markets.
“The housing market has skyrocketed over the past six months following the Fed’s decision to pause interest rate hikes,” said Kevin Koppel, managing director at Knight Frank Asia Pacific. This encouraged me to make a purchasing decision.” , Said. “Ongoing supply-side constraints such as input costs, labor shortages and construction delays are playing a role in supporting prices in many Asia-Pacific cities.”
Knight Frank said Singapore remains a “safe haven” despite the global macroeconomic environment becoming more challenging following the city-state’s measures to curb property prices in April last year. He said there was.
The jurisdiction has continued to rise in recent years as a center for family offices and wealth management, in part benefiting from Hong Kong’s tough pandemic measures and political upheaval. There are also downsides. That said, Singapore’s property market is hot, making it difficult for many people trying to make a living in the island nation. The price of state-owned housing, which is owned by about 90% of Singaporeans, rose by 10% in 2022, on top of double-digit price increases in the previous year. Singapore has doubled stamp duty for foreigners to 60% to curb upward pressure on prices. Mr Savills said the jurisdiction had the highest such levy in the world. (sauce: Reuters, June 28, 2023. )
Other particularly strong markets include Manila. In Metro Manila, prices rose 8.6% year-on-year, boosted by the reopening of business process outsourcing (BPO) companies. This has increased the number of expatriates returning to oversee business operations, contributing to the region’s strong performance, the report said.
In Australia, the Reserve Bank of Australia (RBA) has kept its official cash rate target unchanged at 4.35% as of December 2023. With the exception of Melbourne (up 3.2% y-o-y), Australia’s other major cities, namely Perth, Sydney, Brisbane and the Gold Coast’s mainstream housing markets, all rose in the range of 10.8%-12.8% y-o-y in 2023. We recorded double-digit growth.
Turning to New Zealand, Knight Frank said prices in Wellington and Auckland rose 2.75% and 0.5% year-on-year respectively, reversing previous double-digit declines.
As for mainland China, Knight Frank expects the market to remain weak despite efforts by the Chinese government to stabilize the property sector. “The housing market downturn will continue into 2024, with transaction volumes still declining, indicating there is room for further contraction in the sector,” he said. Knight Frank added that Hong Kong’s housing market faces similar challenges to China, including weak market sentiment, high interest rates and a large inventory of unsold new apartments.
Japan and South Korea: Prices continued to rise in Tokyo and Osaka as yields above the cost of debt continue to offer attractive spreads for investors. Seoul’s prices fell 5.5% year-on-year due to a slowdown in the export-driven economy and higher borrowing costs.
Finally, Knight Frank looked at India, noting that the top eight real estate markets recorded 5% growth in annual sales.