Singapore’s private homes are now the most expensive in Asia-Pacific, having overtaken Hong Kong, according to a new report.

Data from the Home Attainability Index from the Urban Land Institute (ULI) Asia Pacific Centre for Housing showed the median price of Singapore’s private homes was $1.2 million in 2022, compared to Hong Kong’s $1.16 million.

Private rental homes in Singapore also had the highest monthly rent in the region at $2,600 — “far exceeding” other cities such as Sydney, Melbourne and Hong Kong, according to the report. 

The report drew on government statistics from 45 cities in nine markets in Asia-Pacific — while measuring home attainability for both home ownership and home rentals in relation to the median income of households.

Home prices in Hong Kong “dropped substantially” in 2022, ULI said, citing the significant increase in mortgage interest rates as Hong Kong keeps pace with the U.S. Federal Reserve.

In October, Hong Kong’s home prices plunged to a five-year low as interest rate hikes pushed up borrowing costs. 

Earlier this month, Hong Kong’s monetary authority raised the base interest rate to 5.5%, after the U.S. central bank hiked the fed funds rate to 5% to 5.25%. 

The ULI report said “a net outflow of population” and “less optimistic view” on the local property market also brought Hong Kong’s median home price down by 8.7% — from 2021’s $1.27 million to about $1.16 million in 2022. 

Meanwhile, Singapore’s private homes overtook Hong Kong’s as the most expensive in Asia-Pacific, with the median price increasing over 8% in the past year, said the report.

Just last month, Singapore raised taxes for property purchases amid concerns that surging prices “could run ahead of economic fundamentals.”

In a new round of cooling measures, the Singapore government said local and foreign buyers of residential properties will have to pay higher taxes, known locally as additional buyers’ stamp duties. 

However, the report added that Hong Kong’s private homes are still the most expensive on a per square meter basis — costing $19,768 and “well over twice” the median figures for Singapore, Shenzhen and Beijing. 

Singapore’s private rental homes have the highest monthly rent in the region, having increased by nearly 30% in 2022. 

ULI attributed the increase in rent and home prices to various factors such as an increase in migrants, a slowdown in building completion and young professionals moving out of their multi-generational family homes for more space and freedom. 

Private home prices saw a decline in Sydney and Melbourne as more people moved back to regional cities and an “unprecedented” 11 interest rate hikes in 12 months, the report added.

But houses and apartments across Sydney, Melbourne and Brisbane saw an increase in the median monthly rent.

Sydney’s house rentals cost a monthly average of $1,958 while apartment rentals were at $1,732.

“There has been a reversal of population movement back to capital cities since the end of Covid-19 in 2022. This was likely one of the reasons for the increase in median rent in the country,” David Faulkner, ULI’s president for Asia-Pacific told CNBC.

Despite Singapore’s private homes being the most expensive in the region, the city state also has the highest homeownership rate at 89.3%. 

That’s in spite of a 7.9% increase of median HDB prices from 2021 to 2022, with the ratio of median HDB price to median annual income also rising from 4.5 to 4.7. HDB, or the Housing Development Board, is Singapore’s public housing authority.

For private homes in Singapore, the ratio is 13.7. 

“In general, homeownership is considered unaffordable when the ratio of the median home price to median annual household income exceeds five,” said the report. 

“By this standard, only Singapore’s Housing Development Board (HDB) units and apartment units in Melbourne and Brisbane, Australia, are considered affordable.” 

Similar to last year’s index, mainland Chinese cities have among the lowest ranks in terms of home attainability. 

The report noted that the homeownership rate in China has “declined substantially” in the past 10 years.

“The cities’ home attainability is directly tied to the amount of new housing supply relative to increase in population,” it added. 

“For Shenzhen, its population increased by more than 7 million in the 12-year period from 2010 to 2022 … yet its new housing stock increased by only 31 million square meters, the smallest increase [among Chinese cities] during the same period.”