Conditions Tighter for Home Attainability, ULI Reveals

An internationally regarded index of home affordability across the Asian Pacific has underscored tougher conditions in many markets, suggesting a repositioning to create more equitable housing across the region.

The 2024 Asia Pacific Home Attainability Index by the Urban Land Institute (ULI), a comprehensive overview of housing attainability for the Asia Pacific, was released May 22, ahead of the ULI Asia Pacific Summit, which begins in Tokyo on May 27.

In its third edition, the report includes data from three additional cities, Bangkok, Kuala Lumpur, and Perth, expanding its coverage to 48 cities in 11 countries—Australia, China (including Hong Kong SAR), India, Indonesia, Japan, Malaysia, Singapore, South Korea, the Philippines, Thailand, and Vietnam.

Understanding what is driving the demand for housing for a massive part of the global population is important, ULI Asia Pacific chief executive Alan Beebe said.

“In addition to measuring home attainability for both home ownership and rentals in relation to median household income across 48 cities, the report has also identified key trends and factors affecting home attainability in the Asia Pacific region, which represents 60 per cent of the world with a population of 4.3 billion people,” Beebe said.

“By identifying key factors impacting housing supply and demand, we can work towards advancing best practices in residential development and to support ULI members and local communities in creating more equitable housing opportunities for all, aligned to our goal at the ULI Asia Pacific Centre for Housing.”

The index measures median home price to median annual household income, and median monthly rent to median monthly household income to formulate a level of home attainability.

▲ With cheaper apartments in Tokyo's 23 urban wards, buyers from mainland China are flocking to the country, pushing up prices.

Ideally, median home prices should be less than five times the median annual household income and median monthly rent less than 30 per cent of the median monthly household income. 

The report found that Sydney and Melbourne had decreasing vacancy rates for rental accommodation of 0.9 per cent and 2.2 per cent respectively and that Sydney in particular was seen as a gateway city for migrants and students. 

Sydney houses were likely to cost 12.8 times the median annual household income while apartments were likely to cost 6.4 times the income. 

In Melbourne, houses were likely to cost 8.9 times the median annual household income and apartments were 4.9  times the median annual household income. 

In terms of renting, Sydney houses were 32 per cent of the median monthly household income and apartments were 30 per cen, while Melbourne houses cost 25 per cent of the median monthly household income to rent and apartments cost 24 per cent.

Turning to overseas, and the report found that Singapore and Tokyo have experienced increases in home prices as immigration increased with rises nudging 40 per cent in condominium prices across Tokyo’s 23 urban wards. 

Part of the price hike in Tokyo is due to an increase in foreign buyers from mainland China, the report found, with prices at $US800,000 in Tokyo compared to more than $US1 million in Shenzen, Shanghai and Beijing.

▲ Housing in Shenzen, China is the least attainable in the region with home prices 32 times the annual median household income.

IT professionals moving back into India’s IT hub Bengaluru have driven up home price to annual household income ratio from 11.1 to 16.4 with Bangkok’s media condo price now 21 times the annual household income, the report found.

“The housing market has been significantly affected by heightened interest rates and rising costs,” Beebe said.

“Home ownership represents the most valuable asset for most households, and the housing sector is a key part of the overall economy. 

“Moving forward, we expect to see governments in the region introduce more countermeasures to rein in rising home prices.”

Other key findings show that public housing in Singapore (top image) is the most attainable across the region while Shenzen homes are the least attainable. 

Singapore has 90 per cent of its total housing stock at less than five times the annual household income with Shenzen’s housing costing 32 times more than the household income.

Outside of the capitals Tokyo and Seoul, cities in Japan and South Korea have the most affordable rental housing with 18-25 per cent of monthly income spent on rent in South Korean cities and 14-16 per cent spent in Japanese cities.

The report said many cities were investing in transportation infrastructure to create connections between suburbs and city centres, prompting high-density infill development around stations.