Singapore housing market ranked 2nd most expensive in the world

Average price growth in the Singapore housing market is modest compared to other gateway cities according to CBRE’s fifth annual Global Living Report.

The Singapore housing market ranked second among the most expensive residential property markets worldwide, while Hong Kong maintains its top position, according to research released today by CBRE. Nonetheless, property prices in Singapore housing market are relatively more affordable, costing about half that of prices in Hong Kong on a per square foot basis.

Average price growth in Singapore housing market was also at a low 1.1% outpaced by Hong Kong and Shanghai which recorded 5.5% and 11.2% growth, respectively.

Singapore housing market
Screengrab: CBRE

In the fifth annual Global Living report, CBRE has compared the housing markets across 35 key global cities. The results reinforced that investments in urban areas such as transport infrastructure, connectivity, retail, cultural centres and housing are key drivers of economic growth.

Jennet Siebrits, Head of Residential Research at CBRE UK, comments, “In the fifth edition of the Global Living report, we have expanded the number of cities we examine from 29 to 35. They include the most exciting cities in the world, from emerging technology-driven powerhouses like Shenzhen and Bangkok through more traditional capital cities such as Rome and Lisbon, to rapidly evolving modern urban centres like Dubai and Johannesburg. The world’s greatest cities continue to transform to encourage innovation, increase their working and living populations and create new commercial opportunities for businesses.”

The top three most expensive housing markets to buy a property are once again in Asia, all of which have maintained the same positions as last year. Hong Kong remains the most expensive city with the highest-value residential real estate, with an average residential property costing US$1.235 million (US$2,091 per sq ft).

The Singapore housing market maintains its second place, averaging US$874,372 (US$1,063 per sq ft), and Shanghai is third at US$872,555 (US$714 per sq ft).

These three cities have introduced cooling measures to keep prices under control.

Global Living: Top 10 highest value locations

 Rank     City Average property
price ($US)  
Average price per
square foot ($US)
 1  Hong Kong  1,235,220  2,091
 2  Singapore  874,372  1,063
 3  Shanghai  872,555  714
 4  Vancouver  815,322  n/a
 5  Shenzhen  680,283  726
 6  Los Angeles  679,220  466
 7  New York  674,500  526
 8  London  646,973   776
 9  Beijing  629,276   575
 10  Paris  625,299   985

Source: CBRE

Desmond Sim, Head of Research, Southeast Asia, weighs in, “As a financial hub, Singapore is known for its skilled talent, ease of doing business, top-notch infrastructure, as well as economic and political stability. Singapore has always been an attractive location for multinational companies to establish their regional headquarters. These factors influence the cost of property ownership in the city. Having said that, property prices in Singapore are still relatively affordable compared to those in top-ranked Hong Kong and our average price growth over 2018 is one of the lowest compared to the other 34 cities in this study.”

Average house prices are growing in 30 out of 35 cities. The biggest year-on-year growth was experienced in double-digits by Barcelona (16.9%), Dublin (11.6%), Shanghai (11.2%) and Madrid (10.2%).

Ms Siebrits adds, “House prices increased year-on-year across 30 out of the 35 cities we looked at, although generally at lower rates than last year. In general, we are seeing house price growth slow across cities as we move towards the end of a long property cycle. We would expect increasing interest rates to be affecting cities in the US and various cooling measures affecting the Asia Pacific region, although Shanghai still saw robust growth.

“Six out of the ten cities with the highest house price growth are in Europe. Three of these – Barcelona, Madrid and Dublin – all suffered severe price falls in prices during the financial crisis and took much longer to recover from the economic downturn that followed. Now that they are recovering, they are showing significant growth. In comparison, London recovered much faster after the downturn and is now further into the cycle.”

Global Living: Top 10 cities for house price growth

Rank       City   Average house price growth 
 1  Barcelona  16.9%
 2  Dublin  11.6%
 3  Shanghai  11.2%
 4  Madrid  10.2%
 5  Paris  9.1%
 6  Moscow  8.9%
 7  Cape Town  8.7%
 8   Milan  7.0%
 9   Los Angeles  6.4%
 10   Istanbul  6.1%
  …   …  …
 12   Hong Kong  5.5%
  …   …  …
 27   Singapore  1.1%

Source: CBRE

Mr Sim adds, “To prevent cost of living from becoming too prohibitive for its citizens, the Singapore government has since introduced a series of property curbs to cool the housing market. 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.”

The research also highlighted considerable rental growth in many European cities, including Lisbon, Madrid, Dublin and Barcelona. Supply constraints and increasing demand were among the factors leading to Lisbon and Madrid’s continuing double digit rental growth.

Ms Siebrits comments, “Six European cities feature in the top ten for rental growth, including London. All these cities are facing increasing demand and a fundamental lack of supply. In addition, the three Canadian cities – Vancouver, Toronto and Montreal – are driven by strong employment growth and low vacancy rates.”

Global Living: Top 10 cities with the highest monthly rent

Rank       City  Average monthly rent (US$) 
 1  New York  2,844
 2  Abu Dhabi  2,807
 3  Hong Kong  2,777
 4  Jeddah  2,399
 5  London  2,389
 6  Los Angeles  2,312
 7  Dublin  2,226
 8  Riyadh  2,199
 9  Dubai  2,044
 10  Singapore 1,935

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Written by Ravi Chandran

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