Alexandra Tsang, a saleswoman in her late 20s, and her boyfriend have been looking to buy an 800-square-foot flat in the New Territories for under HK$3 million. But they say they have found it difficult and agree with the politicians who have been proclaiming for two weeks that property prices are unreasonably high. 'The price of flats is the key concern ... it's not the right time to buy because prices have gone up too much. I prefer renting a flat at this stage,' Tsang said. But between them the couple earn at least HK$50,000 a month - the exact amount varies from month to month - so their views may have been influenced by the recent debate over home prices rather than the realities of the market. If they put down a 30 per cent deposit - as most buyers do - on a flat costing HK$3 million and take out a 20-year mortgage for the remaining 70 per cent, their monthly mortgage repayments would be HK$10,723 - just 21 per cent of their gross income assuming it is HK$50,000. The government said last week the so-called home purchase affordability ratio was 34 per cent between April and the end of June. That means someone who bought a 45-square-metre home in that period, earns the median household income and took out a 20-year mortgage for 70 per cent of the purchase price would pay, on average, just over a third of that income in mortgage repayments. The ratio was well below the average for the past 20 years of 53 per cent, and far below the ratio of 93 per cent at the peak of the property market in 1997, Financial Secretary John Tsang Chun-wah told the Legislative Council yesterday. According to property agent Midland Realty, the average flat cost HK$4,234 per square foot last month, very similar to that in March last year. Government data shows the average flat price is equal to 7.6 years of median household income, very close to the figure for the past 20 years but higher than the United Nations and World Bank standards of three and four years respectively. A property price index compiled by Centaline Property Agency and City University shows prices as a whole are at 73 per cent of their peak in 1997. However, the figure for Hong Kong Island is 83 per cent but that for New Territories West only 54 per cent. Data from Centaline shows the home purchase affordability ratio rose to 36 per cent last month. The rise was small because, though prices rose, mortgage interest rates have fallen to as little as 2.1 per cent, a record low. Centaline chairman Shih Wing-ching said homebuyers should consider future changes in interest rates. 'Compared to 10 or 20 years ago, flats are more affordable,' he said. 'But if a family can afford mortgage repayments of HK$10,000 a month, I suggest they do not pay more than HK$6,000 a month.' HSBC Asia-Pacific chairman Vincent Cheng Hoi-chuen also warned investors to be prudent when buying property, as prices were quite high. The average mortgage interest rate in the 1990s was 9.8 per cent; since 2000 it has dropped to 3.84 per cent. If interest rates rose to five per cent, the affordability ratio would reach 46 per cent assuming flats cost the same as today. So if a household such as Tsang's bought a flat of the sort the couple have been looking for, their mortgage repayments would be HK$13,859 a month, almost 30 per cent more than now.