Both highly populated and land scarce, Hong Kong and Singapore have some similarities. Both cities have some of the highest-priced properties in Asia.
But the next 12 to 15 months might set them apart.
Property analysts believe that the real estate market in Singapore has gone through its cycle and prices are now nearing the bottom. The market has been on the decline for 15 consecutive quarters – that is almost 4 years. This is the longest slide since data was first published in 1975. Starting from 2013, the government as implemented a series of property cooling measures, which have proven effective if the numbers are anything to go by. Home values have fallen 12% since its peak in 2013.
There are expectations of property prices rising 10% to 15% within the next 12 to 15 months. The imminent market rebound is promising for sellers. For buyers, the window of opportunity to snap up a good deal is closing.
Foreign buying is expected to rise once again, as the market readies itself to welcome in particular buyers from mainland China.
In Hong Kong however, things will not be quite the same. Property prices, already high, are likely to remain at its current levels. It will be immensely difficult for prices to fall. And even if they do, by how much?
Hong Kong will have to partly attribute its sky rocketing real estate prices to its proximity to China and her ready pool of buyers. While Singapore’s price-to-income ratio has declined to 10 times, Hong Kong’s has risen by 15 times. Though property experts do not yet see a bubble forming in the Hong Kong market, the government is already taking steps to avert the potential formation of one.