Property prices of Hong Kong remain on top of the world for the 12th straight year.
Photo from CFP
By WANG Tingting
Hong Kong's property prices are reaching for the skies, making it the world’s most unaffordable housing market for the 12th consecutive year.
In Hong Kong, it takes at least 23.2 years for an average family to afford a home that’s up from the already interminable 20.9 years in 2019. And this is just for the entire family's income, without any spending whatsoever. Demographia rates the Hong Kong market four times higher than its highest category of "severely unaffordable."
The fancy prices did not stop sales and purchase agreements in 2021 reached a 9-year peak, with overall home prices rising by 6.5 percent.
Hong Kong's low-interest policy also contributes to inflation. Most homebuyers currently opt for floating interest rates at about 1.4 percent, the lowest level in 11 years.
Yet Hong Kong continues to emit positive signals, especially at the top end, and the mortgage threshold is about to be lowered even further. In February, the financial secretary of the Hong Kong government Paul Chan said the government planned to relax the property price ceiling for the mortgage insurance program. Homebuyers put only 20 percent of the property price down under and first-time buyers can apply for up to 90 percent of the price ceiling for properties costing less than HK$12 million (US$1.5 million).
Hong Kong's land market is just as reliable. In February, a site in Repulse Bay sold for 1 million yuan per square meter. The market has softened slightly in the past two months, with residential property values down by over 5 percent.
In a move to increase the housing supply and improve housing affordability, a new metropolis will house 2.5 million on undeveloped land between Hong Kong and Shenzhen. But for now, and for some time to come, the world’s most expensive housing market is destined to stay that way.