Hong Kong has the most expensive housing market in the world, but the problem isn’t land scarcity.
We break down why living in Hong Kong is so expensive — and what the cost means for the city’s population.
Over the last 12 years, properties in Hong Kong have more than tripled in value.
Today, on average, a Hong Konger would need to save their full salary for 20 years in order to buy a home.
The average rent in Hong Kong is nearly twice that of London.
Hong Kong residents pay almost four times as much in rent as New Yorkers do, though the average space per person is nearly half of what it is in NYC.
Rent is so high many can only afford to live in subdivided apartments known as “coffin homes” — 30-square-foot subdivided apartments which are about 1/4th the size of a parking space.
But the problem isn’t land scarcity — it’s the way the land is being used.
Only a small fraction of Hong Kong’s land is developed: Less than one-quarter is built-out and only 3.7% is zoned for high-density living.
The reason for the lack of development is rooted in Hong Kong’s colonial past.
The city was designed to be a low-tax, business-friendly hub, and that model continues today.
In fact, until 1947, only British ex-patriots were allowed to live on the hills overlooking Hong Kong.
Today, this land is owned by the government, who sells it for private use, mostly to billionaires and business moguls.
The trend highlights a problem taking place worldwide: real estate is becoming a store for wealth.
For multimillionaires in Hong Kong, 78% of their assets are held in real estate.
As a result, Hong Kong faces what Professor Ng Mee Kam describes as an “artificial land shortage."
While much of Hong Kong’s real estate sits empty as investments rather than homes, the city’s residents struggle to afford public housing.
The government in Hong Kong has made an effort to solve the housing problem by developing a series of artificial islands built for reclaimed land called Lantau Tomorrow Vision.
However, the project has drawn considerable criticism from environmental groups and more than half of Hong Kongers object to the development.
Purchase prices have stabilized recently due to new policies, political unrest, and the pandemic.
But there is still a long way to go.
To learn more about Hong Kong’s affordable housing crisis, watch the full video:
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