Housing conditions in Asia

Asia is the largest part of the world with a vast territory of 44.5 million km2 and the majority of the population, which is a more than 4.1 billion person. Despite the fact that this part of the world is developing faster than others, the quality of life and housing in general are quite low. This article explores three countries with high quality housing: Japan, Singapore and South Korea, and four countries with low quality housing: China, India, Indonesia and Afghanistan. In each of the listed countries, the taxation of real estate will be considered, the analysis of the ratio of the cost of housing to the profitability of citizens and rental opportunities for citizens will be given. The results state that economic development plays a smaller role in influencing housing than a large population and high density, technological development directly affects the quality of real estate, military aggravation worsens the indicators of the country. By understanding the levels of population, technological and economic progress of any country in the Asian region, it is possible to roughly indicate the state of housing in every region.


Asia is the largest part of the world with a vast territory of 44.5 million km2 and the majority of the population, which is a more than 4.1 billion person (60% of the population of the entire globe). Asia also has the highest population density of 87 people / km2. [8] At the same time, states weakly limit overcrowding: the region still maintains a very high average annual population growth rate. Despite the fact that this part of the world is developing faster than others, the quality of life and housing in general are quite low. It is possible to get decent apartments, and not be content with only four walls, only in some developed countries with a relatively low population. This article explores three countries with high quality housing: Japan, Singapore and South Korea, and four countries with low quality housing: China, India, Indonesia and Afghanistan. It is worth noting the correlation between the quality of housing in these countries and the fact that three of countries listed are the three most populated in Asia, while China and India together constitute 40% of the population of the entire planet. In each of the listed countries, the taxation of real estate will be considered, the analysis of the ratio of the cost of housing to the profitability of citizens and rental opportunities for citizens will be given. The analysis will use several different indices:

1) Price to Income ratio
The ratio is the main measure of housing affordability (the lower the better). It is usually calculated as the ratio of average prices for apartments to average family disposable income, expressed in years of income.

2) Mortgage as Percentage of Income

Mortgage as a percentage of income is the ratio of the actual monthly value of the mortgage to the family income per house (the lower the better). The average monthly wage is used to estimate household income. It is assumed that 100% mortgage is taken for 20 years for a house (or apartment) with an area of 90 square meters, with the price of square meter being the average price in the city center and beyond.

3) Loan Affordability Index

The loan availability index is the reciprocal of the mortgage as a percentage of income. The formula used: 100 / mortgage as a percentage of income (the higher the better).

4) Price to Rent Ratio

The price to rent ratio is the average cost of ownership divided by the rental income received (when buying to rent) or the estimated rent that will be paid when renting (when buying for living). It is calculated in annual terms, where the monthly rent is multiplied by 12 months per year. Lower values suggest that buying is better than renting, and higher values suggest that it is better to focus on renting housing.

5) Gross Rental Yield Gross rental income is the total annual gross rent divided by the price of the house (expressed as a percentage). The higher the better.



The first country to consider is Singapore. The Republic of Singapore takes the 8th place in the list of countries by GDP per capita (with a size of $ 57,713 in nominal terms for 2017), [18] which indicates an extremely high development and standard of living of citizens. Taxation of residential real estate in this country is progressive. If the owner lives in a taxable object, the interest rate for him varies from 0% to 16%, and the percentage is dynamic «inside» the value of the property [25]. What this means: the percentage increases when a certain amount in the cost of housing is reached. Let us turn to more specific numbers:

Taxation on a specific example: if the value of the property in which the owner lives is 60.000 SGD, then the tax will be 8.000*0 + (55.000-8.000)*0,04+(60.000-55.000)*0,06=2.180 SGD. However, if the owner does not live on the object, but uses it for commercial purposes, then the minimum tax rate will be 10% for the first 30,000 Singapore dollars. Then, for every subsequent 15.000, 2% is charged up to a 20% interest rate (90.000 SGD). For non-residential real estate rate is fixed and is 10%.

As for the coefficients, the Price to Income Ratio is 21.1, which is quite a large number. Mortgage as a percentage of income is equal to 128.8% – an acceptable value, meaning that 28.8% of family income will be sent to the mortgage. It is worth noting that experts agree that no more than 28% should be allocated for mortgage payments. Price Rent to Ratio ranges from 37 to 43 – average values ​​that suggest the possibility of both buying property and renting it. Buying an apartment in Singapore is a matter of rich people: one square meter on the outskirts costs $ 8.130, and in the city center $ 16.290 and this is at an average wage of $ 2.900. However, the interest rate on mortgages in the country is quite low – 2.06%. [6]

Next, we consider an example of buying an apartment of within the city and outside the center, where the area of the apartment is multiplied by the cost per square meter in the selected region. The monthly payment for each country is 75% of the average monthly income with an initial contribution of 20% of the cost. Next, using the mortgage calculator [19] the final payment and the number of years required for full payment are calculated. However, before that, the annual inflation rate is subtracted from the available mortgage rate. The inflation rate for Singapore is 0.7% [14].

This data means that the apartment under consideration in Singapore in the center and on the outskirts for an ordinary citizen will take 38 and 17 years of payments, respectively. Similar calculations will be made for each country in question. The next moment to consider is the rental of apartments. On the basis of information about the rent for 1-room and 3-room apartments, as well as data on the average monthly salary, data are compiled on the possibilities for concluding a lease agreement. The calculation formula is simple: the rental price in the selected region is divided by the average monthly salary. Thus, renting a one-room apartment in the center will take away 61.8% of its income from an ordinary Singaporean, and only a third outside the center. One resident cannot afford three-room apartments, as in this case the rent is higher than the monthly income by 2.6%. The only option: consider an apartment away from the main streets. In this case, the cost will be 64.4%.

Singapore is one of the developed countries that offers high quality housing for people who are able to pay, while remaining loyalty to the lower strata without burdening them with taxes. Investments in this region are possible only with large deposits, and relocation implies high rental payments.


The second developed country is Japan. With regard to taxation in this country, the tax is levied in the amount of from 1.4% to 2.1% of the assessed value of the land or building. For land used for residential purposes, one third of the assessed value is not taxable. For residential land up to 200 square meters, one sixth of the assessed value is subtracted from the taxable amount. To exclude property tax, the estimated value of the land should be no more than 300,000 yen ($ 2.703), whereas for a house the threshold value is 200,000 yen ($ 1.802). [24]

The price-to-income rating is only 11.5, which is almost 80% less than Singapore’s ratio (21.1). This means that housing in this region is much more affordable. This is also confirmed by the incredibly low mortgage rate of 1.36% and inflation of 1.3%. [13] It is worth noting the important fact that the loan affordability index is rarely higher than one, and mortgage as a percentage of income is usually higher than 100%.[5]

Due to low housing prices in relation to Singapore, mortgage coverage is much less:

The average Japanese can buy an apartment on the edge of the city in just 8 years, or choose a living space in good infrastructure, but with payments over a 17-year period. At the same time, he practically will not pay interest. The state actually offers its citizens interest-free installments. Another option is to rent and spend only 30% of the income on a one-room apartment in the center. 20% will go to the same room outside the city, and three-room apartments in the same area will cost 39% of the total income. The maximum option considered, a three-room apartment in the city center, will take 70% of the monthly salary.

Japan has highly developed technologies and equally high standard of living (23rd place in per capita GDP) [18] accompanies the provision of housing of the same quality. With the lowest mortgage rate on the planet, Japan provides excellent conditions for both buying real estate and renting it.

South Korea

The third developed country is the Republic of Korea. In addition to enhancing cultural influence in the countries of America and Europe, the heads of the country do not forget about their citizens. Although South Korea is not a leader in the global housing market, it nevertheless provides a wide range of housing. The tax on real estate in the country is quite loyal: the land is usually taxed at 0.20%, buildings are generally taxed at 0.25%, villas are taxed at 4%, and houses other than villas are taxed at progressive rates, from 0.15% to 0.50%. [26]

Price to Income index is higher than Japanese, but lower than Singapore. Mortgage as Percentage of Income falls into the category “up to 28%”, indicated earlier. The rate on mortgage lending is higher than that of the countries already reviewed. Price to index indicates a predisposition to rent real estate, rather than to purchase. [7]

The rent in the Korean Republic is lower than in Japan, but the cost of housing for the purchase exceeds the same figures from neighbors. As already shown by the Price to Rent index, it is more profitable to rent in Korea than to buy. With similar data on income, but different in the cost of housing, as well as inflation of 2 percent, [15] the mortgage repayment period increases:

The situation with renting is much more convenient: in the country one room will take only 16% of family income, and three rooms – 37%. Real estate in the center will cost a little more – 24% of the monthly salary for a one-room apartment and 2/5 for a three-room apartment.

Overlooking South Korea, once again it is worth noting cheap rent, and Koreans are trying to reduce it even more, so there are types of housing with extremely small space exist in the country. The so-called Goshivons occupy only 6-7 square meters, containing a bed, a table and a mini-fridge. Goshivons resemble Soviet communal apartments, as showers, toilets and kitchens are in public use. «One-rooms» occupy from 20 to 25 square meters. They additionally include a small kitchen and sometimes a toilet. There are also “Two-rooms”, consisting of two rooms, “Officetels” with security and standard apartments. [29] In general, good housing is available in the Republic, but the rental institution is well developed.


The fourth country considered in this article is the most populated on the planet and a potential superpower country. [16] China currently has the strongest economy [27], but the living conditions in the country leave much to be desired at least because of the terrible state of the ecology. City real estate tax applies to enterprises of foreign investors and individuals. Property owners (but not land) are subject to this tax, which is charged at 1.2% of its assessed value. If the property is rented, the applicable tax rate is 12% and it is charged on the annual rental income. The rate can be reduced to 4% for the rental of residential real estate. However, the practice may vary by region, as applicable tax rates are determined by local authorities.[21]

Inflation in China is 2.2% per year. [10] Housing affordability rating is extremely low. A different factor from, say, Japan is that housing prices are about the same, and the difference in average monthly wages is significant, China gets 3 times less: $ 880 against $ 2600 from Japan [2]. In China, it is rather difficult to rent an apartment, and it is not possible to buy your own for an average monthly salary:

Let us take a look at buying a smaller living space:

In connection with this situation, the Chinese people mostly live in poor conditions: apartments of 5, 7, 11 square meters are a frequent practice. There are even so-called “capsule” houses and hotels in the country. The situation with renting is also deplorable: renting a one-room apartment far from the central streets will take up more than a third of the monthly budget; closer to the urban routine, only one room will cost $ 512 – almost 60% of the total possible income. It should be noted that a sufficient part of the population lives on a smaller amount. The rent of three rooms will take 70% of the budget on the outskirts and 130% in the center, which will not give an opportunity for one family to pay rent. For the reasons listed above, in China it is practiced to divide one apartment for several tenants. The state wanted to ban such practices, but possible restrictions had no effect on the mood of either landlords or tenants. [28]

The great economic progress of China should have had consequences. Being an example to follow in the world market, the internal general condition of citizens is extremely pitiable: overcrowding has turned the country into an anthill, in which ordinary citizens find it difficult not only to buy but also to rent a living space.


India is the second most populous country [16], rapidly catching up to China, who limits the birth rate. Before conducting various calculations, it is worth noting that 70% of the country’s population lives in rural regions. India, like China, is a rapidly developing country whose population does not live in the best conditions. India produces $ 9.5 trillion, making it the third largest economy in the world, [27] however, in terms of GDP per capita, the country ranks only 122nd as of 2017. [18] A significant part of the population lives on the verge of poverty. As for taxation, non-residents who receive rental income are taxed at progressive rates. Income derived from the lease of land, buildings and furniture is subject to unpaid 15% income tax levied on rent. This tax is credited to the taxpayer’s general income tax account. Taxable income is calculated on the basis of the actual rental value of the property or the rental price determined by the government, whichever is higher. [22] However, it is worth noting that with a huge population, only small percentage pays taxes, which leads to dirty streets and complete turmoil, including a high crime rate, especially towards women. In general, the mentality of the Indians allows them to live in such rhythm, whereas for a foreigner the local flavor can be insane.

The Price to Income Index indicates a high availability of housing. However, the quality and type of real estate in India and, for example, Japan, which has approximately the same value of this index, differs significantly. The values of rent and housing costs are much lower than those of the countries already reviewed, but the average wage in the country is only $ 460. [3] The percentage of inflation is 2,33. [11] In this case, the purchase options for an Indian citizen are as follows:

Thus, an ordinary Indian cannot afford a large apartment in the center of the city, so on the main streets housing is either rented by more wealthy citizens, or a smaller living space is bought:

Renting one room will take from 21% to 35% of the monthly budget, three rooms will cost 82% in the heart of the city (therefore apartments for several people are often rented) and half of the earnings in the less busy part.

In general, in India, rich areas are closely adjacent to slums. The overwhelming majority of the population, unfortunately, is in poverty, living in small rooms / apartments, in addition, the disturbed environment is an additional disadvantage. Incomes of citizens allow renting only small areas of land, but the situation is, nevertheless, better than in neighboring China.


The sixth country in question is Indonesia. The third largest population in Asia and the fourth in the world, [16] The Republic is located on archipelagoes and islands at the intersection of the Pacific and Indian Oceans. Indonesia is the largest island state, whose population density is extremely unevenly distributed: more than half of the population lives on only 7% of the entire territory. Density on this site is more than 1000 people per 1 km2; if Indonesia consisted of only seven percent, it would be among the ten most densely populated countries. [17] Taxation: Capital gains tax is levied at a single rate of 20% of the total sale value of the property or of the assessed value for property tax purposes, whichever is higher. The total rental income is subject to a value added tax of 10%. The size of the tax on real estate is 0.5% of the estimated value of the property. [23]

The Price to Rent index is low, which indicates a predisposition to buying a home, rather than renting it. A positive feature in the Indonesian real estate market is gross rental income, slightly exceeding 5% per year. The average wage in the country is even lower than in India, and is $ 338 per person, with inflation at 3.23%. [12] For such wages with a mortgage interest rate of 8 and a half percent and relatively high housing prices, buying a large new apartment for an Indonesian is extremely problematic: [4]

However, dealing with a small living space is much easier:

Acquisition of such housing may at a distance be profitable from a financial point of view, since the percentage of gross income is quite high relative to the countries considered, and the period for full repayment of mortgage debt does not exceed ten years. Given the low levels of income in the country, rent is a rather heavy burden for the average person: a small apartment in the center will take up three-quarters of the income, only in low-populated areas you can find cheaper options, but you will still have to pay a little less than half of your own budget. Options with a larger area are unaffordable for citizens (163% and 95% of income depending on the region), so investing in such housing for wealthy citizens can only be considered in resort regions aimed at wealthy tourists, for example, in Bali. However, the value of real estate there will definitely be higher than the national average.

In general, residential buildings and estates in rural regions, which are small one-story buildings, are designed for families and are inherited. Options for buying a home for the subsequent rental may be interesting for potential investors, while the Indonesians themselves are left to inherit property and options for buying a very small living space. High rental payments in the Republic stop the desire to rent an apartment, but in regions with developed tourism, renting out their own homes to foreign citizens is an additional, and sometimes the main source of income.


The last country to take a look at is Afghanistan. This country was included in research due to aggressiveness and war threats. These factors hugely affect housing in region. The whole estate area is in quite poor condition. In addition to real estate objects that are in disrepair, many are simply abandoned and no longer represent any value. The quality of construction is low, there are difficulties with the provision of drinking water and small plots are three factors that have a negative impact on the home market. The current legislation of the country prohibits foreign citizens to act as the owner of some kind of real estate on their land. All issues related to the financing of large projects with the involvement of developers (international) are usually resolved in private. There is a compulsory tax in the country. Its size depends entirely on the value of the property. In addition, if the transaction is somehow conducted by a foreign citizen, then it is the buyer who must compensate these costs. [20] The following indexes may show possibly good situation, but the factors named affect the market quite negatively.

The population of Afghanistan is really poor, earning a bit higher than $ 200 on average, and there are no perspectives for improvements in the close future. [1] With a really small inflation rate of 0,2% [9], buying a 60m2 flat for a country resident is impossible:

The same calculations for smaller apartments:

Buying houses in Afghanistan may be reasonable only in case if you are a citizen and live there or you have to visit the country often. For the second group, who are mostly politicians, prices are usually higher, as they are looking for property in the center of the capital Kabul. Renting might be an option for people: in the worst case scenario you won’t lose a house during war. The prices though are high: 73% of monthly earnings for a room in center and 154% for three rooms – mostly poor population can’t afford this. Living outside the center in rural and dangerous regions will cost 41% and 84% of wage for one-room flat and three-room flat respectively.

Overall Afghanistan is a hard place to live in due to war and terrorism occupying the country. Investing in region seems like a waste of money with the authorities banning foreigners from buying estate. Most transactions related to rental housing in the domestic market are oral agreements. The same applies to transactions with tourists, except when it all ends with the signing of short-term contracts.


All data collected about buying the apartments is presented in a table below:

Low Price to Income Ratio values mean high affordability of the property (not mentioning quality). Mortgage Rate minus Inflation Rate helps understand the amount of interest that citizens are paying yearly to buy apartments.  Monthly mortgage payments correlate with quality of houses and Years to buy a flat show actual affordability of real estate in country for average person.

All data collected about renting the apartments is presented in a table below:

Price to Rate Ratio shows, which way citizens should turn – high values are for buying property for future resell or living and low values are for giving estate for rent. Monthly wage correlates with quality of property. The lower percentage of monthly wage spent on 1-room and 3-room flat in center and outside the center, the better. Value over 100 means there is no possibility to rent a room for one average person.

The main characteristics are presented below:


In general, the Asian region is divided into densely populated ones with poor housing and high-tech ones with good quality real estate. However, there are common problems with both the purchase and the rental in each region. Economic development plays a smaller role in influencing housing than large population and high density. For example, Singapore is the second country in the world in terms of population density, and this significantly affects the population’s ability to obtain housing. Technological development directly affects the quality of real estate and the oveall mood of the citizens. Japan has achieved high success in this segment, and now offers extremely low mortgage rates, helping their inhabitants to get the desired square meters, despite the existing restrictions on construction (the country is subject to natural disasters). By understanding the level of population, technological and economic progress of any country in the Asian region, we can roughly indicate the condition of real estate in the region. It is also worth noting an important factor that military threat does not affect the countries in the article (except Afghanistan). The countries of Western Asia, the region of Pakistan and Afghanistan, and the border with Africa are areas of heightened aggressiveness: here is the Israeli-Egyptian conflict, most of the terrorist groups and few controlled territories. Military aggravation, of course, worsens the indicators of the country and the mood of citizens. The Asian region is incredibly huge and interesting; in general, the population here lives poorly and in weak housing conditions, often in bad ecology, however there are small, highly developed regions (Macau, Singapore, etc.).


  1. Coefficients and cost of housing in Afghanistan
  2. Coefficients and cost of housing in China
  3. Coefficients and cost of housing in India
  4. Coefficients and cost of housing in Indonesia
  5. Coefficients and cost of housing in Japan
  6. Coefficients and cost of housing in Singapore
  7. Coefficients and cost of housing in South Korea
  8. Description and statistics for Asia
  9. Inflation Rate in Afghanistan
  10. Inflation Rate in China
  11. Inflation Rate in India
  12. Inflation Rate in Indonesia
  13. Inflation Rate in Japan
  14. Inflation Rate in Singapore
  15. Inflation Rate in South Korea
  16. List of countries by population
  17. List of countries by population density
  18. List of countries in terms of GDP per capita
  19. Mortgage calculator
  20. Taxation in Afghanistan
  21. Taxation in China
  22. Taxation in India
  23. Taxation in Indonesia
  24. Taxation in Japan
  25. Taxation in Singapore
  26. Taxation in South Korea
  27. The list of countries in terms of GDP (PPP)
  28. Types of housing in China, article
  29. Types of housing in South Korea, article

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