Dream supply ratio

If the property price falls a few times, it will be enough to “reduce the hot”. It has always been the question that most people want to know or want to guess. The Chief Executive Lin Zhengyue mentioned an indicator last week: the burden on the building is 40%. It seems that this indicator is true. Far from falling enough!

According to the “Economic Daily” report: “Lin Zhengyue, who is visiting Switzerland, said that when interviewed by Bloomberg Television, Hong Kong’s home purchasing power index, that is, the ratio of contributions to the public’s income has reached 70%, and the government’s target is 40%. It is obvious that if these figures are seen, it is obvious that there is still room for adjustment in property prices. Property prices and land shortages are still issues that the Hong Kong Government needs to face. The Government will continue to invest in infrastructure projects.

Latest ratio 74% far high long-term average

The burden level of property prices has different calculations. It is more common to compare the household income with the median price of the property and calculate the result of the so-called “no food or drink for X years.” Former Tang Rong mentioned that the latest calculation of Hong Kong data by the international consultancy Demographia was 20.9 years. It is the most difficult burden in the world and it has broken all records.

As for the purchase purchasing power index mentioned by Mrs Lam, the ratio of contributions to the income of the public, or the ratio of the burden of mortgages commonly known in the market, the calculation method is much more complicated. According to the calculation method in the Government Economic Report, apart from property prices and private buildings. In addition to the household income level, a unit area (medium-sized unit with a saleable area of ​​484 square feet), a 70% mortgage, a 20-year repayment period, and a mortgage interest rate are considered as relatively “sticking to the ground” to reflect the public supply.

According to the latest government data, the mortgage burden ratio for the third quarter of 2018 is 74%, which is much higher than the long-term average of 44% between 1998 and 2017. If it is to return to the 40% indicator mentioned by Lin Zhengyue, It is about the same as returning to the level around 2010.

In the most general point of view, the private property price index of the DPI in November last year was 366.3 points. In returning to the 163 points at the end of 2010, it was a 56% drop. Using this as a policy indicator, the building There is still room for falling prices is definitely not scary!

If we analyze in detail, as mentioned above, the burden ratio of mortgages is determined by three floating factors: property price, household income and mortgage interest rate. The unit area, mortgage number and term are still fixed. In the past eight years, property prices have risen, and the median income of private housing households has also increased. The latest data for the past three seasons in 2018 is 39,700 yuan (all households, including households with non-economic activities), compared to 2010. In the fourth quarter, 255,000 yuan also rose by 56%.

In other words, household income has risen, and property prices that were previously unaffordable may feel relatively affordable. The current mortgage interest rate is about 2.375%, 70% mortgage, 20-year repayment period, and family income of 39,700 yuan. The burden on the building in the third quarter of last year was 74%, which is roughly equivalent to a unit price of 8 million yuan.

40% of government indicators, the price of property fell by about 40%?

Under the same conditions mentioned above, the mortgage supply ratio should be reduced to 40%, and the property price needs to be adjusted to about 4.29 million yuan, which is equivalent to a drop of 46%. It is also a scary figure.

The third possible situation is that while property prices have fallen, household income has risen, allowing property prices to “softly land” to a certain level. The chief executive of Lin Zhengyue will go to the end of June 2022, about three and a half years ago, assuming a 4% increase in household income every year, and a cumulative increase of 15% to 45,550 yuan in three and a half years. In terms of ratio calculation, the property price level is about 5 million yuan, which is 38% lower than the current one. It has fallen by more than 10% in about one year!