The Strategist

Demographia: Housing in Hong Kong is the most expensive in the world

01/25/2017 - 15:34

According to annual report of Demographia research company, housing in Hong Kong was the least affordable in the world in 2016. Average cost of real estate there was 18.1 times higher than average annual household income. In total, Demographia’s analysts have studied more than 400 cities in nine countries. Of them, New Zealand (5.9) and Australia (5.5) are noted as states with the most expensive housing.

This week, Demographia research firm has published its annual 13th report on affordability of housing in different cities. Hong Kong appeared the least affordable since average cost of housing there is 18.1 times greater than average annual household income before taxes. It’s the seventh time when Hong Kong is ranked first in the rating. Now, level of housing affordability there has increased a little in comparison with the record high back in 2015. Then, value of real estate in Hong Kong exceeded 19 times the average income. On the whole, according to the report, Hong Kong is an example of "significant deterioration in housing availability" - the figure was 11.4 in 2010. 

Demographia’s analysts examined 406 cities in nine countries - Australia, Britain, Hong Kong, Ireland, Canada, New Zealand, Singapore, the US and Japan. Affordable authors of the study reckon that housing in areas, where coefficient is less than 3, is affordable. The moderately unaffordable category ranges within from 3.1 to 4, seriously unaffordable - from 4.1 to 5, very inaccessible - more than 5.

The second place after Hong Kong is occupied by New Zealand, where price for average property exceeds the average income 5.9 times. Australia (5.5) took the third place, Singapore (4.8) - the fourth, the United Kingdom (4.6) is on the fifth. In Japan, the ratio is 4.1, Canada - 3.9, in US - 3.6, Ireland - 3.4. List of the cities with the least affordable housing, in addition to Hong Kong, includes Australian Sydney (12.2), Canadian Vancouver (11.8) and New Zealand Auckland (10).


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