From Hong Kong to Sydney, Home Prices in Asia’s Most Expensive Cities Are Falling


Some of Asia-Pacific’s most expensive housing markets are starting to cool after last year’s breakneck growth. 

Home prices have begun falling in Sydney and Hong Kong, while values in Singapore barely rose last quarter, as buyers wary of rising interest rates and economic headwinds choose to sit on the sidelines. 

The turnaround couldn’t be more abrupt, after low borrowing costs and a fear of missing out during the pandemic spurred a global property frenzy that stretched from Toronto to Auckland. Sydney’s prices soared almost 27% last year, while values in Singapore jumped the most in more than a decade and Hong Kong remained the world’s least affordable place to buy a home. 

Though conditions vary across the region, there are some common denominators behind the slowdown. Concerns over affordability prompted Singapore to impose property curbs, while inflation risks are leading central banks to consider rate hikes that would make it harder for home buyers to pay their mortgages. 

Meanwhile, Covid-19 is adding to headwinds in China’s real estate markets. Hong Kong is contending with an exodus of residents following its botched effort to contain the latest wave, while a lockdown in Shanghai is dashing hopes of a quick recovery from a slump sparked by a crackdown on excessive debt at developers. 

“Ever since the global financial crisis, governments in the region have turned more vigilant on rising asset prices, while the pandemic has also brought into focus widening wealth gaps,” said Victoria Garrett, Asia-Pacific head of residential at Knight Frank. “Although the switch from a seller’s market will unveil more opportunities, buyers will likely turn more selective and price sensitive.”

For 2022, residential prices across the region are projected to grow at a milder and more sustainable rate of 3% to 5%, Garrett estimates. That’s lower than last year’s 9.1% gain.

To be sure, demand may hold up in some markets, partly because a lack of housing stock is unlikely to be alleviated in the next 12 months, Garrett said. And with the rate-hike cycle still in its initial phase, there remains a window of opportunity for buyers to take advantage of still-conducive financing rates, she added.

Buyers elsewhere haven’t been deterred. In the U.K., home prices climbed at the fastest annual pace since 2004 in March, while values across 20 cities in the U.S. are also surging.

Below is a run-down of the latest housing trends in key cities. 


Home prices in Australia’s most populous city are showing signs of fatigue near record highs as expectations grow that the central bank will begin raising interest rates soon

Already, affordability is weighing on the upper-end of the market with income growth trailing well behind price gains: between March 2020 and December 2021, wages increased 3.3% compared with a 22.6% lift in dwelling values. The median home value in Sydney is more than 17 times the median salary in the country.

In addition, Australia’s gross household debt as a share of disposable income is near a heady 200%. All that has made buyers in the nation’s largest housing market cautious. Home prices in the harbor city eased 0.2% last month on top of losses in February, snapping a winning streak that began in October 2020.

“A lot of it has to do with interest-rate talk, and Sydney, because it is such an expensive market, is very sensitive to talk about rate rises,” said Nerida Conisbee, chief economist at real estate firm Ray White. Waning competition at auctions “reflects the sentiment that has really changed towards the willingness of people to pay well above what the reserve price is.”

Hong Kong

Residential prices in Hong Kong have been trending down since August with no quick recovery in sight. Challenges range from a slumping economy and rising interest rates to the continued departure of locals and expatriates frustrated with political tensions and strict social distancing measures.

The city’s housing market appeared unstoppable last year, with prices breaking a record in August. Values have since declined 7.3%, according to Centaline Property Agency Ltd. UBS Group AG expects prices will fall this year due to the population outflow and rate hikes. Goldman Sachs Group Inc. is even more pessimistic, predicting a 20% drop by 2025. 

“Home prices will remain under pressure at least in the near term,” said Rosanna Tang, head of research for Hong Kong and Greater Bay Area at Colliers International. “In addition to Covid-19, other market uncertainties including geopolitical tension and interest-rate risks are also delaying homebuyers’ decision-making.”


After a banner year that saw prices climb the most in more than a decade, Singapore’s housing market is cooling on the back of property curbs and higher taxes. Growth in prices of new private homes slowed to 0.4% last quarter, while sales in March slumped to the lowest in 21 months. 

Authorities introduced cooling measures in December to address a lack of affordability along with the risk that households may struggle to pay their mortgages at higher rates. In February, the government announced higher property taxes targeted at wealthy residents, which could prompt some buyers in that segment to sit on the sidelines. 

Still, analysts have said that the curbs may just be a short-term fix given there is genuine demand among locals, such as those upgrading to private units from their public apartments as well as millennials seeking to live on their own. 

Rising consumer prices may also spur potential buyers to enter the market sooner rather than later and retain purchasing power, said Alan Cheong, executive director of research at Savills Plc. “Inflation is the opioid that drives demand,” he said. 


Residential prices in Shanghai, one of the most resilient housing markets in China, resumed rising in December following three months of declines, after officials took steps to arrest a slowdowncaused by a liquidity crisis at developers. Now the rebound is being threatened by the financial hub’s sweeping lockdown

“We have now seen Covid taking a stronger hold in Shanghai, which may limit the market in the second quarter as a result,” said Roddy Allan, chief research officer for Asia Pacific at Jones Lang LaSalle.

Still, the city’s longer-term outlook looks better, thanks to low inventory and interest-rate cuts. An economic slowdown has pushed China into easing mode, in a stark policy divergence with other major economies. The central bank in January cut a key rate for the first time in almost two years, while major banks have lowered mortgage rates and shortened loan approval times.

Home sales in Shanghai will probably stabilize this year, potentially rebounding around the year end, said Yang Hongxu, a director at E-House China Enterprise Holdings Ltd.’s research institute.