Wednesday, 22 January 2014

Fact of the Day: HK Flats are "Unaffordable"

Many families in Hong Kong live in cramped conditions like this one
We already knew this in Hong Kong, but now we have proof -- the city has the most unaffordable housing in the world -- for the fourth year in a row too.

The survey of 360 cities was done by US-based consultancy Demographia, and it found Hong Kong was number one, followed by Vancouver and Honolulu.

Hong Kong's median home price was found to be more than HK$4.02 million ($518,181), while the annual median household income of HK$270,000 was nearly one-15th of the home price.

As a result Demographia rated the housing affordability in the city as "severely unaffordable".

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

He said that property prices continued to rise as the government did not increase the land supply. Hui says the housing problem will continue for the next two years as it will not be eased until more housing is available in 2016.

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

Demographia calculates that if housing exceeds three times annual household incomes, then serious political issues need to be addressed with regards to land supply, infrastructure planning, provisioning and financing.

When compared to other Asian countries, Singapore's media home price is 5.1 times the gross annual median household income.

And people wonder why Hong Kong people are so obsessed with the housing issue...

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