Hong Kong breaks record for least hous­ing prices

The Pak Banker - - BUSINESS -

HONG KONG: Hong Kong has the least af­ford­able hous­ing of 87 ma­jor global cities, with prices a record 19 times av­er­age pre-tax house­hold in­come, a new sur­vey said. Hous­ing in the south­ern Chi­nese city is clas­si­fied as "se­verely un­af­ford­able" by the re­port from think tank De­mographia. The rat­ing was the least af­ford­able ever recorded in the 12year his­tory of the or­gan­i­sa­tion's in­ter­na­tional hous­ing af­ford­abil­ity sur­vey, the re­port said.

Buoyed by in­creas­ing de­mand, wealthy main­land Chi­nese in­vestors and US mon­e­tary pol­icy - which has fu­elled a bor­row­ing spree thanks to low in­ter­est rates - Hong Kong has be­come one of the world's least af­ford­able places for home own­er­ship. A 40-square me­tre flat would be ex­pected to set a buyer back more than US$750,000, ac­cord­ing to data from the Hong Kong Prop­erty Re­view. How­ever, an­a­lysts have pre­dicted the city's prop­erty bub­ble will burst as US in­ter­est rates rise - the Hong Kong dol­lar is pegged to the US dol­lar and in­ter­est rates in the city will re­flect US rates.

The city's govern­ment has also pledged to boost hous­ing sup­ply to meet de­mand, fur­ther prompt­ing pre­dic­tions for prices to fall. In the De­mographia sur­vey, Syd­ney ranked as the se­cond least af­ford­able city with Van­cou­ver third. The sur­vey cov­ered cities in Aus­tralia, Canada, Hong Kong, Ire­land, Ja­pan, New Zealand, Sin­ga­pore, Bri­tain and the US. "Vir­tu­ally all of the ge­ogra­phies cov­ered in the sur­vey are fac­ing more un­cer­tain eco­nomic fu­tures than in the past," the re­port said. "Younger peo­ple and lower in­come peo­ple tend to be at greater risk. In this en­vi­ron­ment, a bet­ter stan­dard of liv­ing for all should be a prin­ci­pal pol­icy pri­or­ity," it added. The city's govern­ment has also pledged to boost hous­ing sup­ply to meet de­mand, fur­ther prompt­ing pre­dic­tions for prices to fall. In the De­mographia sur­vey, Syd­ney ranked as the se­cond least af­ford­able city with Van­cou­ver third.

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