The View | Is the worst over for Asia’s housing markets? Mixed signals mean it’s hard to tell

There are different ways to interpret recent signs that the worst of the downturn in Asia’s housing markets has passed. Some analysts have been quick to call a bottom. This was easy in the case of Hong Kong, where prices began rising the moment Beijing ditched its zero-Covid policy and are up 7 per cent since mid-December after a 16 per cent fall in the previous 16 months.

Moreover, the best than can be said about New Zealand and South Korea – two of the most vulnerable markets, given excessively high price-to-income ratios and sharp increases in interest rates – is that the pace of the declines in prices and sales is moderating. In South Korea, prices fell 1.1 per cent in February compared with nearly 2 per cent in December.

Another way to view the improvement in the performance of Asia’s housing markets is to put the downturn into perspective. In New Zealand, prices are still 30 per cent higher than when the Covid-19 pandemic erupted. In Australia, home values are 15 per cent higher, and as much as 41 per cent in the case of Adelaide, according to CoreLogic.

In Singapore, there has been no slowdown whatsoever. Since the start of the pandemic, private property prices have surged, rising 3.3 per cent on a quarterly basis last quarter, the 12th straight quarterly increase. The market has been so buoyant that the government has been forced to introduce additional cooling measures.

Last week, it doubled the stamp duty for overseas buyers to 60 per cent and raised the rate on second-home purchases. The more punitive levy for foreign buyers suggests the government expects more overseas demand – particularly from mainland Chinese purchasers – for real estate in Singapore, whose safe-haven credentials have been bolstered during the past three years.