Homes grow more unaffordable as prices climb for 23rd consecutive month

Residential prices rose 1.6% in March, extending the uptrend since April 2016.

Home prices in the world’s least affordable housing market have extended their steep climb for the 23rd consecutive month after inching up 1.6% MoM in March, according to Knight Frank’s Hong Kong monthly report.

Also read: Housing market defies cooling measures amidst aggressive market takeup 

Hong Kongers may be shunning traditional home launches as residential sales dropped 27% YoY with only 15,000 transactions recorded in Q1.

Property sales also fell 15.6% to a total sales and purchase agreements consideration of $50.5b, according to statistics from the Land Registry.

In fact, a report submitted to legislators on Monday revealed that a growing number of micro flats or homes less than 20 square meters, are mushrooming in Hong Kong as they accounted for 4% of private homes completed in 2017. 

"Most first-time buyers can afford property costs within $6m. However, that budget would only enable them to buy a sizeable flat at old housing estates (those over 30-years-old) in urban areas given prices having reached record high levels,” JLL said in a report.

An average Hong Konger who earns $50,000 in annual income would need around $900,000 to purchase a home as the city ranks as the most expensive housing market for the eighth year in a row, according to annual Demographia International Housing Affordability Survey, which puts the median house prices divided by annual median household income at 18.1.

Mass residential prices are expected to continue rising between 5 to 10% in 2018 whilst the value of luxury homes may rise by as much as 10% this year, Knight Frank added.

Photo from https://www.123rf.com/photo_19295065_hong-kong-housing.html