Reported by Charlotte Lam, Ruby Sin and Suki Sin
According to Demographia in 2015, Hong Kong has ranked as the least affordable city to buy a home globally, the average property price is 19 times of the median household income. Flats in Hong Kong are defined as “severely unaffordable”.
Let’s go deep into the data story and see how insane the Hong Kong property market is.
Sky-high housing price in Hong Kong
The property price showed threefold increases in the past decades. Let’s take flats within 70m2 to 90m2 as an example. At the beginning of the 2000s, the average price of private domestics was around 50K. Yet, it rose dramatically by 3 times in Hong Kong and Kowloon districts in 2015. Nowadays, people have to spend over 5.5 million for a 500 square foot house.
The soaring property price was also observed in other districts. Out of 18 districts, Hong Kong Island accounts for the highest property price including Wan Chai, Central & Western and Eastern districts with an average of 13.8k per sq. feet. The cheapest flats are mainly located in New Territories, such as in Sai Kung, North and Islands districts.
The escalating price shows expensive cost of living in Hong Kong.
Household has to spend over 15 years of income to own a flat
The unaffordability of housing can be clearly discovered by comparing property price to household income. In Hong Kong, the average household income is $22.5k per month, according to the findings of the Census and Statistics Department. The median household income exceeds $30k in some districts, including Wan Chai, Central & Western districts and Sai Kung. Districts like Kwai Tsing, Kwun Tong, Sham Shui Po and Wong Tai Sin have the lowest median household income at around $20k only.
Surprisingly, districts with high household income do not have the most expensive housing.
The following map represents the price to income ratio and property price by districts.
As we are interested in finding out purchase affordability by district, we use the median household income of different districts to calculate years of income required to own a 500-sq.ft. flat in that particular area. Sham Shui Po, Kwun Tong and Kowloon City are districts with the most unaffordable housing. Households have to spend nearly 20 years of their income to afford housing. Even districts with the highest income show the price-to-income ratio at around 16 years.
We have visualized the data by Google Fusion Table as well. You may click this Link to Google Fusion Table and take a look.
Expense and lack of living space compared with the world
Undoubtedly, Hong Kong has the most expensive housing in the world. If you want to buy an apartment in the city centre of Hong Kong, you have to spend over 180k per m2. Comparatively, even flats in London and New York are much cheaper than the one in Hong Kong. Among the 8 capitals in Asia, Singapore has the second most expensive flats, yet it is still ⅓ times cheaper than housing in Hong Kong.
Property in Hong Kong is not only the most expensive one, but also the smallest one around the world. When compared to the other countries, Hong Kong has the lowest average house size as 45 m2. Australia, the country with the largest average house size, is 4.75 times bigger than Hong Kong. Residential floor space per capita in Hong Kong is among the smallest in the world as well. Hong Kong people are forced to live in an unfavourable dwelling with extremely tiny area space.
Government reacts to property problem
In the past five years, the government has launched various measures to solve the housing problem in Hong Kong. It implemented special stamp duty and buyer’s stamp duty to stabilize the property market. This stamp duty successfully stopped speculation and cooled down the market. Also, the Hong Kong government made a target to increase housing supply with 480,000 new units before 2024 to provide better living for Hong Kong residents. More events can be found in the timeline.