The city's happiness level, as measured by an annual survey, dropped to the level in 2008, the year of the global financial crisis.
And the least happy are those in the "sandwich class", whose incomes exclude them from government help without offering them financial comfort.
In the survey by Shue Yan University, 79 per cent of 1,000 respondents said they were happy with their lives, down from 83 per cent last year and the same as the 2008 result.
In the sandwich class, 23 to 29 per cent of those in income bands ranging from HK$5,000 to HK$20,000 said they were "certainly unhappy" or "not quite happy". In other income groups, less than 15 per cent gave such a reaction.
"The loose definition of people within this range is that their income is too high to qualify for government subsidies and too low to be considered middle class," the surveyors said.
It was the sixth annual telephone survey conducted by the university as an "economic and wellbeing project".
The surveyors also identified three possible "happiness policies" for a vote, and found the reactivation of the government-subsidised Home Ownership Scheme the most welcome.
Ninety-two per cent of participants indicated the scheme had made them feel "certainly happy" or "quite happy". The scheme was resurrected in 2011 and the first batch of new flats will be sold to middle-income families in the next couple of years.
The second most popular policy was an increase in the number of public holidays, with 91 per cent of interviewees saying they would like more time off work.
But the survey also found that the idea was not as welcome in the lowest and highest income groups. Less than 90 per cent of the those earning below HK$10,000 a month and of those earning more than HK$50,000 agreed more public holidays would make them happy, while in the income bands in between 90 per cent said they would
A third suggested policy was the "Scheme HK$6000", the one-off handout given by the last administration in 2011. Eighty-nine per cent wanted a repeat.
While 71.7 per cent of those earning less than HK$5,000 said they would feel "certainly happy" to get a HK$6,000 cash handout, only 44 per cent of those earning HK$50,000 reacted the same way.