It takes decades for you to buy a small apartment in these cities
It takes decades for you to buy a small apartment in these cities
The least affordable cities in the world
If you only earn the equivalent of the median income in Hong Kong, Mumbai, Beijing and Shanghai, you will have to wait for 30 years before you can afford a 90-square-metre apartment in these cities.
Those four cities, in that order, have the highest house price to income ratios in the world, above London, Paris and New York City, according to a Bloomberg report, citing a study by quantitative analysis firm Oxford Economics.
Hong Kong’s ranking in the report squares with a report by wealth analytics firm Julius Baer last year that rates the Chinese SAR as the most expensive city for luxury residential property in Asia. Prime homes in the city are priced at USD41.2 million on average, five times as costly as the average for the region.
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Yet investors would find that gross yields from rents in those Chinese and Indian cities are “remarkably low,” suggestive of “stretched” valuations, according to the Oxford Economics report. In fact, gross rental yields in the cities fell short of 10-year government bond yields last year.
Those who hope to own a house in the region on a relatively meager income may yet have reason to wait. “We expect housing price increases to moderate in the coming years across Asia, with outright falls possible in some markets,” stated Oxford economists Tianjie He and Louis Kuijs.
The report went on to rate Tokyo and Singapore as the sixth and seventh least affordable cities in the world. Seoul was lodged at number 10, while Delhi ranked at 11th place, above Sydney, Auckland and Melbourne.
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Source: Property Report