Hong Kong is world’s most unaffordable city
IN Hong Kong - the world’s most unaffordable housing market - rents are staying exorbitantly high despite a severe recession, threatening to add a new source of discontent after months of political turmoil.
The economy is forecast to shrink by as much as 8 per cent this year and the unemployment rate is near a 15-year high, at around 6 per cent.Yet, home rents remain one of the world’s most expensive while pulling back about 9.2 per cent in August from the previous year.
High rents combined with the surge in joblessness are making it harder for blue-collar workers and those on the fringes of povert y to f ind and hold on to even meagre liv ing spaces.
Housing inequality has long been a hot-button issue in Hong Kong, where tens of thousands live in tiny subdivided flats that are sometimes so small they’re called cage-homes.
In a mid-year study, real-estate services provider CBRE Group reported that Hong Kong remains the world’s most expensive place to buy a property. Monthly average rents in the city stayed the world’s third highest after New York and Abu Dhabi.
Hong Kong’s rents were estimated by CBRE to be 7 per cent below New York’s last year, but they are more unaffordable because Hong Kong’s median income is just 35 per cent that of New York’s, according to calculations by Bloomberg based on latest government data.
Despite the drop in Hong Kong’s overall private residential rents in the past year, the plight of the underprivileged didn’t improve. The average rent for a bed space of 18 sq ft rose 15 per cent in August from a year earlier, according to a recent report by Society for Community Organisation, a non-profit group.
A survey included in the report also showed that almost half of the 439 respondents living in subdivided or caged homes said their landlords raised their rents in the past three years. A majority of the respondents also considered their rents expensive.
Hong Kong’s homeless situation has worsened during the coronavirus pandemic as low-wage workers, from cleaners to restaurant staff, have lost jobs, according to Ng Wai Tung, community organiser at the non-profit Society for Community Organisation.
While there have been subsidies given to businesses, less has been done for the homeless, many of whom face a waiting list for hostels and rising hostel rents, he said. “They feel helpless and hopeless.”
The utilisation rate of subvented hostel places is about 80 per cent, according to the government representative.
A study by the non-profit group found that 36.5 per cent of 104 respondents said they started to become homeless this year.