How many years will take a Hongkonger to buy a home?
Forget about the pandemic control, border closure and brain drain. All these expatriates-unfriendly factors did little harm to Hong Kong‘s reputation as the most unaffordable city.
For 12 consecutive years, Hong Kong topped Sydney and Vancouver as the least affordable housing market with a median multiple rising to 23.2 last year from 20.7 in 2020, according to the Demographia International Housing Affordability report for 2022.
In other words, it would take 23.2 years for a local resident to buy a home even without spending any of its income.
To make things worse, this was the highest multiple ever recorded in the report after Hong Kong recorded a fourth consecutive time of exceeding 20 times.
That compared to the No.2 least affordable city Sydney, which had a median multiple of 15.3.
Among the 92 countries under study, only Hong Kong and Singapore made the list in Asia. But Singapore trailed behind Hong Kong by a long-distance. Singapore’s affordability rating worsened slightly to 5.8 in 2021, from 4.7 in 2020.
The deterioration of Hong Kong’s housing affordability last year was largely due to, as Demographia suggested, a drop in disposable income under the pandemic.
This is perhaps why Hong Kong government is determined to increase housing supply with the Northern Metropolis development plan that could eventually house a population of about 2.5 million.
However, Hong Kong’s reputation as the most unaffordable housing market won’t change in the short-term.
Billy Mak Sui-choi, an Associate Professor of the Department of Finance and Decision Sciences at Hong Kong Baptist University told Hong Kong Economic Journal that Hong Kong could still be the world’s No.1 expensive city next year because the supply of new private home is unlikely to expand much in the short term. Also, income is unlikely to go up under the pandemic and cloudy economic outlook.
He added that the survey only considered the median income but not the fact that a substantial population was in public housing estates.
The exodus of people would not help either. Some 92,000 people have left Hong Kong this year since the start of the fifth wave, according to Immigration Department.
Of course, not all people are gone for good. In fact, lots of them are expatriates who want to escape from a planned lockdown this month, as well as mainland university students going back to hometown as face-to-face classes were suspended.
And only few of them, I presume, are leaving because of the unaffordability because we have been used to the situation in the past three decades.
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