The price of Hong Kong property must fall by nearly 90% to be affordable

The price of Hong Kong property must fall by nearly 90% to be affordable.

Hong Kong’s property prices are the most difficult to continue to become a global brother. In fact, if there is no avalanche, it is difficult for Hong Kong to bear the name of the city. In the definition of an advisory body, property prices in Hong Kong will fall by nearly 90% before they can return to the ranks of affordable levels.

According to the report of the international consultancy Demographia, as of the third quarter of 2018, the median price of Hong Kong was 7.169 million yuan, the median annual income of the family was 343,000 yuan, and the property price was 20.9 times.

According to the definition of the organization, the burden level can be divided into 4 groups, the multiple is 3 times or less, even if it is affordable (Affordable), 3.1 to 4 times is moderately unaffordable, 4.1 to 5 times is unaffordable (Seriously Unaffordable), 5.1 times or more is Severely unaffordable.

Assuming that the annual income of Hong Kong people remains unchanged, the median price of property prices will fall to nearly $1 million, which is an affordable level. At current levels, property prices will fall by 86%. Even if it falls to the unaffordable level, the property price will fall to 1.715 million yuan, or 76%.

Low interest rate, low demand

However, many scholars and members of the real estate industry believe that it is difficult for property prices to fall in an avalanche.

There are three reasons for this: the contradictions between China and the United States are no longer showing signs of deterioration. The pace of interest rate hikes in the United States is still at a low level. On the other hand, the demand for home ownership by local residents is still huge.

Take the recent first-hand market as an example. As long as the new offer price is as low as 20% to 30%, a large number of buyers have entered the market. In the past weekend, the first-hand market recorded more than 640 transactions, a 44-week high, and the property prices. The role of support.

Based on the leading index of the Central Plains City, the latest report was 170.2 points. At present, the property price has fallen by about 10% from the highest point of 188.64 points. Although the burden level has improved, it has to be removed from the name of the most difficult city in the world or fall to an unaffordable level. There is a distance, and it is difficult to change the situation in the short term.