Date
16 July 2019
Average home price per square foot in Hong Kong was almost double that in Singapore last year, according to a survey. Photo: Bloomberg
Average home price per square foot in Hong Kong was almost double that in Singapore last year, according to a survey. Photo: Bloomberg

HK remains world’s most expensive housing market, by wide margin

Hong Kong remains the most expensive city in the world to buy a home, according to CBRE.

There is no big surprise there, yet there is plenty of reason why we should be alarmed at the latest research from the global real-estate consultancy.

The worrisome fact is this: Hong Kong is in a league of its own among the world’s priciest housing markets, and is also continuing to widen the gap with the rest.

As per the fifth edition of CBRE’s “Global Living” report, which has just been released, an average property in Hong Kong now costs US$1.235 million, or about HK$9.6 million.

That puts it far ahead of the second ranker, Singapore, where the average property price stood a tad above US$874,000. 

Among other top global cities, New York had average property price of US$674,500, standing in the 7th position, while London had average price of a little below US$647,000, putting it in the 8th spot.

Shanghai and Vancouver were ranked third and fourth on the list, with average property prices in the cities at US$872,555 and US$815,322 respectively.   

Going through the data, what’s really striking is the average home price per square foot. In Hong Kong, it was US$2,091, almost double that of Singapore (US$1,063) and about four times greater compared to New York (US$526).

Hong Kong properties were three times costlier than those in Shanghai, where an average home was sold at US$714 square foot.

The numbers mean that home prices need to triple in Shanghai before they can match up with Hong Kong counterparts, while in Singapore they need to double if they are to level with those in its rival.

In other data, Hong Kong ranked third in average monthly rental (US$2,777), trailing only New York (US$2,844) and Abu Dhabi (US$2,807).

Annual rental growth in Hong Kong stood at 8 percent, putting in the top ten on that parameter, compared with 6 percent in London. 

If Hong Kong maintains its course, the average home price in the city will soon be in the eight-digit region in local currency terms. The lucky residents who have property in their name will become richer, while the others will find their home ownership dreams become even more elusive.

According to CBRE, Hong Kong residential prices were up 5.5 percent from a year earlier in November 2018, despite a hike in interest rates which lifted the mortgage burden for households.

Europe accounted for six of the top 10 cities that recorded the highest home price growth last year, thanks to a long-awaited rebound after a downturn in the wake of the 2008 global financial crisis.

The CBRE numbers were based on the market situation for investment residential properties in prime areas in 35 top global cities. 

The survey pointed out that investments in transport infrastructure, connectivity, retail, cultural centers and housing are key drivers of economic growth.

Hong Kong has many things going for it, but also a lot to worry about, as it is certain that more and more locals will get priced out of the housing market.

– Contact us at [email protected]

RC

EJ Insight writer

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