The risk of housing bubble collapse decreased for Asia's marque real estate price leaders, Hong Kong and Singapore.
Hong Kong and Singapore ranked third and 20th, respectively, according to UBS’s «Global Real Estate Bubble Index» in 2019. Last year, the two major financial hubs ranked first and 18th, respectively.
Within the overall Asia-Pacific region, the bubble index scores have not increased in the last four quarters.
Hong Kong
According to the bank, momentum has slowed and prices have dipped slightly since mid-2018 but stresses that the city remains in bubble risk territory. Real prices are down 2 percent compared to last year’s all-time high with both household income and rents declining in the past four quarters.
«[T]here is no fundamental trend reversal in sight,» the report said. «Still, higher price volatility is likely over the next few quarters.»
Singapore
«Singapore’s housing market, in contrast, has been remarkably stable over the last few years,» the report described of the neighboring rival whose risk score was «fair-valued».
The bank cited effective regulatory tightening as a key driver that led to prices remaining at the same level as 2012 such as the introduction of additional buyer stamp duties for developers and purchasers of investment properties last year, which curbed speculative demand.
