Tuesday, 20 March 2018

HK Housing Prices Continue to Soar

Can you live in a 209 sq ft home that costs US$1 million?
Just when you think property prices can't get any worse, they do.

A flat slightly bigger than a shipping container has been sold for HK$7.86 million (US$1 million), which is HK$37,651 per square foot. A shipping container is 165 sq ft.

The 209-square foot flat is located on Pokfulam Road in Sai Ying Pun, which is part of an 11-unit development built by Kowloon Development. So far the company has sold 60 percent of the flats at Emerald House that range from 209 sq ft to 310 sq ft and cost as much as HK$11.29 million.

The microflats are being built in Sai Ying Pun
And just as you are shaking your head in disbelief, the latest survey shows that 27 percent of Hong Kong people don't ever expect to own a flat. The survey by REA Group, a digital advertising firm that specializes in property, says of 1,003 respondents carried out by Nielsen, 16 percent have no plan to buy property at all because the prices are beyond their reach.

Home prices rose for the 22nd consecutive month in January. If the average Hong Kong person makes about HK$17,200 per month, it will take them 30 years of monthly income to afford a HK$6 million flat. That means not buying anything, let alone eating anything.

REA Group says this inability to afford housing leads to social issues like couples delaying marriage. And as young people can only afford tiny flats that minimizes the amount of stuff they can have in them, and living in tight quarters can also cause more friction between people. Also having to live in a small place long term is hardly good for one's mental health.

How much stuff can you squeeze into a microflat?
But that's the reality in Hong Kong -- the government isn't doing enough to step in to build social housing, or help young people get their foot in the door to help them towards owning a flat.

Financial Secretary Paul Chan Mo-po isn't doing much to help this segment of people, only homeowners with a small break of not having to pay government rates for a whole year. Whoohoo.

If he helped more young people move a giant step forward closer to owning a flat, perhaps there would be more optimism in the city -- that there is hope, that they can feel proud of being in the city and feel more welcome as residents.

However it seems the government doesn't have that kind of long-term thinking. It only wants to build an even bigger war chest... for what?






2 comments:

  1. I fear that at some point the not too distant future, the Hong Kong government will be asked to hand over its surplus billions to the Mainland government. As it is, it's already handing over quite a bit in terms of paying for ridiculously over-priced water and white elephant projects that will benefit the Mainland, if anyone, more.

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    1. Hi YTSL -- interesting theory! But we're making peanuts compared to China these days!

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