Expensive homes: not only in S’pore

but also in Hongkong and across the world, as extracts I’ve reproduced below from the South China Morning Post and the Economist show.

These extracts demonstrate by inference that but for our Government’s busy and much-maligned home-builder, HDB, housing in Singapore may even be far pricier and more out of the reach of those yadayadaing for change and options as codes for cheaper rulers and more steeply subsidised homes.

From SCMP:

“Hong Kong homes are the least affordable among the world’s major cities and are rapidly becoming less affordable – a fact buyers may find to their cost when interest rates rise.
This is the finding of an international comparison conducted by a US consultancy at the request of the South China Morning Post, and Hong Kong government figures.

Hong Kong’s rating of 10.4 was based on a median flat price of HK$2.18 million and median annual income of HK$210,000. That was more than double the five at which the survey ranks a city “severely unaffordable”. Three or less is rated affordable and four is deemed “seriously unaffordable”. 

The survey found Hong Kong people pay more than 10 times their annual income to buy a flat, the most of 272 metropolitan cities and earning it a “severely unaffordable” rating along with London, Sydney and New York.

This was supporyed by Hong Kong government statistics which showed buyers paid 8.5 times their annual  income for an average-sized flat in the last quarter of last year – up from 7.6 times in the second quarter, an increase of almost a year’s income in six months.

However Hong Kong buyers pay less of their annual income on mortgage payments than some of the other most expensive cities – 44  per cent, according to the survey, and 38.1 per cent, up from 34 per cent in the first quarter, according to government figures.

Mortgage rates of  0.8 per cent to 2.1 per cent were making expensive homes look affordable.

The HK government’s affordability rating is based on the average price of a private flat with a saleable area of 45 square metres. After last year’s rapid increase, it now exceeds the 20-year average of 7.5 years but is still well below the 12.3 years at the market’s peak in 1997.

A property agency director noted that some sales at Taikoo Shing had already exceeded 1997 levels, selling at HK$11,000 to HK$12,000 per square foot last month. He expected City Garden in North Point, now selling at HK$7,600 per square foot on average, would soon break the 1997 record of HK$8,100 per square foot.

The annual demand for new housing in Hongkong is 20,000 units per annum.”

From the Economist:

which says that “Houses remain overvalued in many countries where prices are now rising…

The Economist’s latest survey of global house prices shows that housing markets continue to strengthen. Its periodic round-up was dominated for nearly a year by countries where house prices were falling year-on-year.

However, the latest available data show that in half of the 20 countries whose markets the magazine monitors, house prices are higher than they were 12 months earlier.
Since these indicators were last published at the end of 2009, house-price inflation has quickened in each of the seven countries where it was already positive.

In Hong Kong, prices are more than a quarter above their level a year earlier while Singapore has gone from being one of the most depressed housing markets in the third quarter of 2009 to being the second-frothiest in the three months to March.

The story is the same in Britain. British house prices had risen by nearly 10% in the year to the end of the first quarter of 2010, but the country’s price-to-rent ratio still outstrips its long-term average by nearly a third. This pattern—of prices rising in markets where houses still look overvalued—is also seen in Hong Kong, Singapore, Australia, Sweden and Canada.

(These extracts are thanks to the alert from friend IM’s son, MalcolmMoore, via Twitter. Malcolm is the Telegraph’s man in China based in Shanghai).


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