Hong Kong’s Housing market continues to be the most expensive for a record nine years in a row, reveal the annual survey conducted by Demographia, an urban planning policy consultancy. Demographia has been conducting this survey for the last 15 years with an aim to assist global economic planning. The survey seeks to highlight its core premise that smart planning can create successful cities wherein high demographic and economic growth can be achieved without abnormal housing inflation.
Notoriously dubbed the “world’s least affordable market”, Hong Kong is closely followed by Vancouver in terms of unaffordability, as per the 15th Annual Demographia International Housing Affordability Survey: 2019. Though behind by a considerable margin in rates, Sydney and Melbourne are ranked at number three and four by the survey respectively despite the housing boom gone reverse in Australia in recent times. San Jose and Los Angeles hold the fifth and sixth place. London and Toronto tie at the tenth place on the list.
Demographia’s survey determines the affordability index by using the “median multiple” to arrive at an average middle-income housing affordability rate. The median housing price is divided by the median household income or Price Income Ratio (PIR) to arrive at the said index rates.
As per the data collected by Demographia, Hong Kong ‘s median property price was 20.9 times the median household income by the end of 2018. This is higher than the affordability rate calculated in 2017 .
Despite the current rates showcased by the survey, potential home buyers may still get lucky in bagging property at more affordable rates in the cities listed in the survey. This is because property markets are globally facing a value decline be it in Hong Kong or London. Hong Kong’s housing values have been gradually decreasing. The city market has had it’s longest downward curve since 2008. Similarly, the housing prices in the outskirts of London have gone down for the first time since 2011. The Australian housing market, on the whole, has been dealing with a major real estate crash – the biggest since the 1980s.
The most recent study conducted by Demographia collected data from 309 metropolitan markets across Australia, Canada, China (Hong Kong), Ireland, New Zealand, Singapore, United Kingdom and United States. Of these, 29 major housing markets were listed as “severely unaffordable”.
On the other hand, Demographia’s 2019 survey lists United States as the most affordable major housing markets with housing prices recorded at an estimated 3.9 times the household income. Canada (4.3) and Singapore (4.6) bag the second and third rank respectively in terms of affordable housing markets.