Singapore home rents catch up with Hong Kong’s as fortunes of rival business hubs diverge

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Hong Kong home rents are just 12.8 per cent higher than those in Singapore as the gap narrows from the 82 per cent difference witnessed five years ago

Rents are seen rising in the two cities at an identical pace as Singapore’s stamp duties and Hong Kong’s high down payment requirement make outright purchases costly

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The One Pearl Bank residential project, center back, at Outram-Chinatown precinct in Singapore, on Sunday, June 4, 2023. The government reiterated it expects 40,000 home completions this year – the highest in the last five years – and about 100,000 by 2025. Photo: Bloomberg

Cheryl Arcibal

Published: 12:30pm, 9 Jul 2023

Residential rents in Hong Kong and Singapore remain close to parity after the gap shrank dramatically over the past five years, signifying the diverging fortunes of the rival Asian financial hubs, official data compiled by property consultancy CBRE showed.

In 2018, before Hong Kong was hit by an unprecedented wave of social unrest, the rental gulf between the two cities was as high as 82 per cent, with Hong Kong widely labelled as the world’s most unaffordable housing market.

That chasm has shrivelled to about 12.8 per cent in May, with average Singapore rents at US$3.80 per sq ft while in Hong Kong rents averaged US$4.28 per sq ft.

At one point – in the first quarter of the year – the gap had narrowed to as little as 6 per cent with rents in Singapore at about US$3.78 per square feet, nearly catching up with Hong Kong’s US$4 per sq ft.

The Riverfront Residences residential project in Singapore, on Sunday, June 4, 2023. The government reiterated it expects 40,000 home completions this year – the highest in the last five years – and about 100,000 by 2025. Photo: Bloomberg

“Rents are a function of demand and supply,” said Henry Chin, global head of investor thought leadership and head of research, Asia-Pacific for CBRE. “Both cities are in completely different stages of the real estate cycle. Singapore is on the rise and perhaps close to the peak while Hong Kong is at the bottom of the current cycle. With the reopening of the border with the rest of the world, we expect rents in Hong Kong to recover.”