The burden of buying a property in Hong Kong will deteriorate and it will take 21 years to eat and drink.
The trend of property prices in Hong Kong is seriously out of line with the increase in the salaries of the people. The burden of home ownership is heavier than a year! The US consultancy company Demographia published the “2019 International Property Affordability Report", stating that Hong Kong people need to eat or drink for 20.9 years in an average of 20 years, and they can afford a residential unit worth about 7 million yuan. The level has made Hong Kong the top ninth consecutive year in the world’s most “bad top" cities, which is more than 1.5 years before the previous year’s report of 19.4 years.
In contrast, the most difficult cities in the 2nd to 10th places, except for the 7th New Zealand Auckland’s homeownership burden increased slightly from 8.8 years to 9 years, the situation in other cities improved.
The world’s first wicked for 9 consecutive years
Some scholars believe that property prices in Hong Kong are pushed up by foreign buyers and low interest rates. With insufficient land supply, it is difficult to adjust itself. The Government cannot afford to lower property prices without affecting the economic environment. It is possible to hope that the government will increase the supply of public housing and let the price of private buildings that are out of balance with affordability climb.
Demographia surveyed property prices in 309 cities in 8 countries in the third quarter of last year, covering China, Australia, Canada, Ireland, New Zealand, Singapore, the United Kingdom and the United States. Hong Kong is the only Chinese city in the survey. The report calculates the public’s affordability of property prices by dividing the median local property price by the median household income.
The median price of property in Hong Kong was 7.169 million yuan (up 15.8%), divided by the median annual household income of 343,000 yuan (up 7.5%). The net income was 20.9 times. It means that Hong Kong people should not eat or drink. Do not make any consumer spending for 20.9 years, only enough to buy a house, further to leave the second place in Vancouver, Canada (12.6 times) and the third place in Sydney, Australia (11.7 times) [table].
Sydney quenching Vancouver mansion adjustment
The report said that after the completion of the survey in the third quarter of last year, property prices in Hong Kong fell from high levels. Some experts predict that this year’s property prices will fall by 15% to 25%. Although property prices may be significantly adjusted, Hong Kong housing is still very difficult to afford. In addition, property prices in Sydney and Melbourne, Australia, have dropped significantly last year. As for Vancouver, Canada, after raising the stamp duty on overseas buyers, property price adjustments are concentrated in the luxury residential market, and the mid-market burden is showing signs of deterioration.
Li Zhaobo, a senior lecturer at the Zhongda Accounting School, believes that although the above data lags behind, Hong Kong is an international financial center with leading competitiveness, stable environment, many job opportunities, low unemployment rate, no serious natural disasters, and China’s economic growth last year is still 6.6%. Under the uncertain situation in Europe, it will continue to attract overseas people to work and buy property in Hong Kong. Due to insufficient land, it is believed that property prices will continue to be high. In the face of difficulties in home ownership, Hong Kong people can only solve the problem of subsidized housing and require the government to actively engage in intervention.
Scholars promote the public housing and housing industry
Zhuang Taiquan, executive director of the Institute of Global Economics and Finance of the University of China, pointed out that Hong Kong’s property prices have been high for many years and wages cannot be caught up. The public does not dare to hold too much hope for home ownership.
He also said that mainlanders continue to come to Hong Kong to speculate in the property market. The Government cannot push down property prices by 50% or 60% without affecting the economy. It can only increase the supply of public housing to meet the housing needs of the public. Referring to the Singapore approach, if there is a sufficient proportion. Public housing, allowing private housing prices to climb is also indispensable.
Guan Yuzhao, director of the Guanyu Business and Economic Research Center, said that the report did not reflect the recent decline in property prices in Hong Kong. The burden pressure data for this year should be improved compared with last year. However, the demand for Hong Kong people’s home ownership continues to be strong and the impact of insufficient land supply is increasing. Far-reaching, interest rates are low, and mainlanders like to come to Hong Kong to buy bricks. Property prices are difficult to adjust internally. It is estimated that a 15% to 20% drop will bottom out.