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Asia Pacific faces growing affordability challenge

23rd May 2024

Migration and rising costs are challenging housing affordability across Asia Pacific, a study by the Urban Land Institute (ULI) found.

ULKI’s 2024 Asia Pacific Home Attainability Index, which covers the housing market in 48 cities across the region, found that cities experiencing significant immigration inflows have seen home price and rents rise materially.

High prices and rents have damaged home attainability for people in their twenties and thirties, the report found. For example, Bangkok’s median condominium price is around $224,000, which is 21 times the median annual household income.

This affordability challenge has led some national governments to promote rental housing, even in markets where owner-occupation is typical.

Rising interest rates and construction costs have hit residential developers, which is hurting buyers and renters. In Australia, more than 2,000 home builders went out of business in the past two years, largely due to rising interest rates, materials and labour costs. In Vietnam, many developments have come to a standstill as developers fail to meet interest payments.

ULI Asia chief executive Alan Beebe said: “The housing market has been significantly affected by heightened interest rates and rising costs. 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.”

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