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  • Apr 17, 2014
  • Updated: 3:05am
PropertyHong Kong & China

Hong Kong ranks world's No 1 for 'most unaffordable' housing

For the fourth consecutive year, the city is ranked world's No 1 for unaffordable housing

PUBLISHED : Wednesday, 22 January, 2014, 12:55am
UPDATED : Wednesday, 22 January, 2014, 12:55am
 

Soaring property prices in the past few years have given Hong Kong the title of most unaffordable housing in the world for the fourth straight year, according to a survey of 360 cities by US-based consultancy Demographia.

The survey reported that Hong Kong's median home price was more than HK$4.02 million, while the annual median household income of HK$270,000 was nearly one-15th of the home price.

Demographia rated housing affordability in Hong Kong as "severely unaffordable".

"It is impossible for the salary income to catch up," said Polytechnic University real estate professor Eddie Hui Chi-man.

He said property prices had surged sharply while the government "didn't increase the land supply" and only resumed the Home Ownership Scheme for flats in October 2011, after it was suspended for nine years.

In 2012, property prices jumped more than 20 per cent.

Hui believes the housing problem will remain serious over the next two years as new housing supply will not increase significantly until 2016.

"Despite the government cooling measures in the property market, property prices would only drop a few per cent this year," he said. "The prices are still out of the budget of ordinary families."

Sammy Po Siu-ming, the chief executive of the residential department at Midland Realty, said he did not think property prices would drop sharply this year.

"The housing demand from end-users remains strong, while the interest rates are low. And many people are cash-rich," Po said, adding he expected that property prices would fall 5 to 10 per cent this year.

Canada's Vancouver and the United States' Honolulu ranked second and third in having the most unaffordable housing in the survey.

Demographia said if housing exceeded three times annual household incomes, it meant there were serious political issues that needed to be addressed, with respect to land supply and infrastructure planning, provisioning and financing.

In other Asian countries, the survey showed that Singapore's median home price was 5.1 times above the gross annual median household income.

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niall1975@hotmail.com
No. 1 for the most unaffordable and also the tiniest. The majority of HK is an ugly concrete jungle of high-rises. Now they want to build another concrete jungle east of Lantau. Where will it end? HK is already over-populated and there seems no desire to improve the environment; instead let's just add to the problems....all driven by greed and profit. Can't wait to get out of here!!
johnyuan
When I look at this picture of Hong Kong housing, I became emotive. No question that Hong Kong people live in dense concrete jungle that mostly out of sunshine permanently. I can’t imagine such environment was created and accepted for decades and decades. Where comes all these demand that the end seems to justify the means. Even the sky is not a limit.
.
When Hong Kong is giving up space are they also giving up the rights for a healthy environment? Are Hong Kong people have given up their rights and sensitivity that to have a roof over one’s head unexamined is the ultimate reward in one’s life? I know it is not quite so. Hong Kong people are being forced with no easy alternative.
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I am not only emotive but angry. We have ourselves and our environment damaged yet so over-valuated all willfully by design.
lenali2003
Being a young adult working hard to make a living, I can only imagine I can own a flat. It is indeed impossible for the young generation to afford a comfortable living place with their own effort, no matter what jobs they are having.
mdap
OK, I will start by saying I am in a fortunate position, I own my home on the Peak and I have several other properties in Hong Kong, but this is not the reality for many. Worse is what you get for your money - USD1mln in the USA or Australia or Canada gets you more than a very poorly constructed 'private' apartment (which look strikingly similar to housing estates); Hong Kong housing, regardless of what you can afford, cannot be seen as value for money - regardless if it's a Barker Road town house or a new build in Tuen Mun ... value for profit has replaced value for living - and that is the problem with Hong Kong housing.
HK-Explorer
The whole number is wrong. Of course prices seem higher in Hong Kong than in US. This is because the method is flawed. You will actually find prices are reasonable in Hong Kong.
Think about it this way.
In Hong Kong 50% of the people live in government housing. 50% live in private housing.
In USA most people in US live in private housing.
Thus a good measure would be to compare the top 50% of expensive houses in US to Hong Kong private houses. I think you will find US is similar if not higher.
In Hong Hong 50% of the houses have the lowest rents in the first world.
artdig18
Well if you must adjust for that then HK flats are about 1/2 size of those overseas if not less.
Then it brings the costs much higher as well.
gkuhl
It is easier to use the annual Q3 household income, which lies between 420,000 and 480,000 HKD¹. Thus the house-to-income ratio would be around 9.
I think the major problem in Hong Kong is you don't really get a house for that money.
[1] Hong Kong Fact Sheets - Population
lamlm38
it's not the HK gov's fault.. it must be the mainlanders!!!!
lastinspace
After you paid a ton of money for your property, how will you behave if you see its value drastically decrease? 15 times the income? So it is not even in the ballpark of reason. Good luck HK, it all sounds too familiar.
mercedes2233
Property 'value drastically decrease'? When has that happened? Hasn't it just gone up and up?

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