This has been the world’s least affordable city for seven years in a row
This has been the world’s least affordable city for seven years in a row
A slightly less expensive encore after a record 2015
Hong Kong has topped the 13th edition of Demographia’s annual housing affordability survey, marking seven consecutive years of unbeatable home price to income ratios.
It received a “severely unaffordable” mark from the research house for homes that were priced 18.1 times the gross annual median income as of Q3 2016.
This is a slight improvement from the 2015 index in which Hong Kong homes had been valued 19 times the median income, the worst ever record for housing affordability on the survey.
Still, Hong Kong’s median multiple “represents a substantial deterioration in its housing affordability,” the researchers noted. The findings also lend credence to a recent study by Oxford Economics that ranked Hong Kong, alongside Mumbai, Beijing and Shanghai, as having the world’s highest house price to income ratios.
Hong Kong is the only Chinese city to rank in the top 10 of the survey, which covers 406 housing markets worldwide. The city’s exorbitant prices have been driven by “restrictive land-use regulation,” the report stated.
Hong Kong’s recent introduction of additional stamp duties on foreign and second-time home buyers have shown mixed results so far.
More: Hong Kong’s loss in overseas buyers may be Singapore’s gain
Outside the top 10, Singapore and Tokyo have both been rated “seriously unaffordable,” with median multiples of 4.8 and 4.7, respectively. However, the study praised the city-state for its “long-standing public commitment” to reining in the risk of overheating home values.
Sydney trailed Hong Kong with housing values at 12.2 times the median income. Vancouver followed the Australian metropolis at third place with a median multiple of 11.8 — a housing affordability crisis that the British Columbia government confronted last year with controversial new levies on foreign buyers.
Auckland was a close fourth. With homes priced 10 times the median income, the Kiwi market has seen a flurry of speculators aggressively flipping homes over the past year.
In an introduction to the Demographia report, Oliver Hartwich of The New Zealand Initiative urged denizens not to tolerate extreme price levels in the housing market. “High house prices are not a sign of city’s success but a sign of failure to deliver the housing that its citizens need,” he said.
A full list of the 10 cities with the worst housing affordability according to Demographia:
1. Hong Kong
2. Sydney
3. Vancouver
4. Auckland
5. San Jose, US
6. Melbourne
7. Honolulu
8. Los Angeles
9. San Francisco
10. Bournemouth & Dorset, UK
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Source: Property Report