Hong Kong housing became more affordable last year, and still ranked last globally (Getty Images)
Hong Kong has defied an ongoing property slump to maintain its distinction as the world’s least affordable housing market, according to the results of a Demographia survey.
The median home price in the Asian financial hub stood at 18.8 times the median annual income in the third quarter of 2022, down sharply from a multiple of 23.2 in the year-ago period, said the Demographia International Housing Affordability report. Sydney was once again the next priciest city with a multiple of 13.3, easing from a year-earlier 15.3.
The survey, published by the non-profit Urban Reform Institute and the Frontier Centre for Public Policy, covers 94 housing markets in eight countries, including Australia, Canada, China, Ireland, New Zealand, Singapore, the UK and the US. Within China, the only city covered is Hong Kong, where existing home prices fell 15.6 percent in 2022, according to government data.
“Hong Kong has been given a clear responsibility by the central government to improve housing affordability, and increase house sizes,” author Wendell Cox said in the report.
Record Improvement
Demographia defines a median multiple of 5.1 or above as severely unaffordable and does not attempt to compare cost per unit of area, household sizes or other demographic factors.
Wendell Cox authored the Demographia report (Image: Demographia)
The report said Hong Kong’s decline of 4.4 median multiple points was the most substantial improvement ever recorded in the 19 years of the series. Still, the affordability situation in Hong Kong remains more severe than that of any other housing market during the city’s 12 years of coverage by Demographia.
Other Asia Pacific markets in the severely unaffordable bracket include New Zealand’s largest city, Auckland (10.8), followed by Australia’s Melbourne (9.9), Adelaide (8.2), Brisbane (7.4) and Perth (5.4).
Singapore, meanwhile, saw its multiple dip from 5.8 last year to 5.3 as it clung to the cheaper tier of the severely unaffordable group. Demographia said the city-state’s affordability may be comparatively more favourable based on unique elements of the Housing and Development Board.
“For example, all new HDB houses are heavily subsidised, which makes houses more affordable to first-time buyers,” the report said. “In addition, some buyers can qualify for grants from the Central Provident Fund (social security system).”
Pacific Premium
The least affordable housing markets globally after Hong Kong and Sydney are four Pacific cities of North America: Vancouver (12.0), Honolulu (11.8), San Jose (11.5) and Los Angeles (11.3).
Markets in Canada collectively registered a median multiple of 5.3, with the country showing a considerable loss of housing affordability since the mid-2000s — especially in Vancouver and Toronto (9.5). By contrast, there was no housing affordability deterioration in the more than three preceding decades in Toronto, Demographia said.
The US median multiple of 5.0 puts the world’s largest economy squarely in the seriously unaffordable category, after flashing a moderately unaffordable 3.9 as recently as 2019. Outside of Hawaii and California, Miami (8.5) is the least affordable, followed by metropolitan New York (7.1), which also encompasses parts of neighbouring New Jersey and Pennsylvania.
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