Hong Kong has been ranked as the world’s least affordable housing market for 2019 – for the 10th consecutive year – according to a survey released on Monday.
The special administrative region has a median multiple – the median house price divided by the median household income – of 20.8, a modest improvement from the previous year’s 20.9, a report by urban planning policy consultancy Demographia International Housing Affordability said.
The median multiple is a house price-to-income ratio that’s widely used for evaluating housing markets. It means a family on average needs to save up for 20.8 years without spending a single dollar to get enough money to buy a home in Hong Kong.
As of the third quarter of last year, the SAR’s median apartment price stood at HK$7.04 million, while the annual median household income was HK$338,000.
Hong Kong is categorized as “severely unaffordable”. Trailing Hong Kong, Vancouver is the second-least affordable major housing market, with a median multiple of 11.9, while Sydney is third at 11.0.
Hong Kong’s property prices surged 3.4 percent in 2019, according to the Centa-City Leading Index, which tracks home prices in 100 housing estates in the city, despite the ongoing social unrest which has taken a heavy toll on the local economy.
The sky-high home prices are linked to an acute shortage of land, the report said, adding that new residential development has been strongly controlled by the Hong Kong government since the 1970s.
The Task Force on Land Supply, which was set up in September 2017, proposed designation or reclamation of significant new areas for housing development in late 2018 in a bid to improve housing supply and affordability.
Meanwhile, several private housing developers have contributed portions of their land holdings to alleviate the housing shortage. Wheelock Properties, controlled by locally listed Wheelock and Company, said last month it will lease several plots of land in Tai Po, Tuen Mun and Tung Chung to the government for a nominal fee of HK$1 each for a period of eight years.
Hong Kong has a large public housing program to ease housing woes. However, there’s still a shortage of public housing. The Hong Kong Housing Authority says the average waiting time for public housing for applicants was about 5.4 years in September last year.
The Demographia survey covered 309 metropolitan markets across eight countries, including Australia, Canada, the United Kingdom and the United States.
