Hong Kong remains the most expensive housing market not only in the Asia-Pacific region but also worldwide based on the Demographia International Housing Affordability Study.
It would take around 21 years for a family to buy a median-priced house in the city. A lack of developable land primarily serves as the reason behind the steep cost of residential properties, aside from demand from residents. While this may seem as beneficial for investors, not many can afford to purchase their own property let alone invest in one. For this reason, other markets in the Asia-Pacific region have become alternative destinations.
Some property types in Hong Kong have fallen recently in terms of value, but it did little to stop the city from becoming the most expensive place to live in the world for the ninth year in a row. Data from the government’s Rating and Valuation Department showed that lived-in housing prices dropped 7.2% since September 2018. An industry forecast showed that prices are expected to decline further by up to 10% this year.
Despite the drop, the city remained far ahead of the other most expensive cities in the world. In Vancouver, for instance, a household would need to save money for 12.6 years to buy an average property. Sydney and Melbourne ranked behind the Canadian city.
Other Unaffordable Places
A family in Sydney would have to earn 11.7 times the average household income in the city to purchase a house, while those in Melbourne would have to make 9.7 times more than median income. Auckland in New Zealand also ranked as the seventh most expensive housing market in the world.
Singapore fell out of the top 10, but it’s still unaffordable to buy your own place in the Lion City. You would have to save almost five years to buy a median-priced home. It’s unsurprising then for foreign investors to consider buying properties in other countries in the region, such as the Philippines.
The Philippine Housing Market
Some experts have chosen Metro Manila in the Philippines as an alternative place for residential real estate investors. A condominium in Ortigas for sale or a similar one in Makati have been the standard choices, due to the relatively cheaper cost against the possible net yield. For this year, the market is expected to endure economic headwinds from a falling currency to higher interest rates.
Demand for commercial properties will also be a key trend in the coming months, particularly for offices and retail centers. Foreigners are generally not allowed to buy real estate in the country with the exemption of condominium units. Since property developers own the land beneath the properties, non-residents have been able to acquire the leasehold interest on the units.
Buying a house in Hong Kong or Sydney as an investment might not seem a good plan for now, as prices remain high and property valuations have gone downhill. If you plan to buy a house in the Philippines, consider homes in a resort-like development nestled in the center of the city for the best chances of price appreciation.