Hong Kong is still the world’s most expensive city to live in as disparity between the median home price and the median household income continues to expand, according to the 14th Annual Demographia International Housing Affordability Survey.
The 2018 edition of the survey, conducted by urban planning policy consultancy Demographia in the third quarter last year, covered 293 cities in nine countries, including China, the United States, Australia, the United Kingdom, Canada, Singapore, Japan, New Zealand and Ireland. Hong Kong was the only Chinese city that was ranked.
The results unveiled on Monday showed Hong Kong topped the list for the eighth year in a row, with home prices regarded by Demographia as being “least affordable”.
The median multiple, or the ratio of the median price of property to the median household income, was 19.4 times in Hong Kong, as the former was found to be HK$6.192 million and the latter HK$319,000, according to the survey.
That means it will take 19.4 years for an average household to afford an apartment in Hong Kong even if there were no other expenses.
The figure was up from 18.1 times a year earlier and the highest level ever recorded since the survey began in 2005.
The other cities in the top five were Sydney, Vancouver, San Jose and Melbourne. Their median multiple was 12.9, 12.6, 10.3 and 9.9 times, respectively.
Based on Demographia’s definition, a city with a median multiple of 5.1 or exceeds the 5.1 times mark is considered “severely unaffordable”.
Citing data from the Chinese University of Hong Kong, it said the median multiple in Hong Kong was only 4.6 times in 2002, but continued to rise and reached 15.7 times in 2015, the Hong Kong Economic Journal reported.
Professor Terence Chong Tai-leung, executive director of Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, said the city has seen home prices rise relentlessly over the past years, and the government will find it difficult to reverse this trend because it is the product of a free economy.
While the government can impose restrictions on home purchases as Beijing does, reaching the goal of “Hong Kong property for Hong Kong residents” will come at the expense of the city’s status as a free economy, Chong said.
He advised the public not to expect Hong Kong’s home prices to fall and urged the government to study the feasibility of lowering down payment requirements for home buyers so that they can purchase their own homes as early as possible.
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