5 Quick Facts About World's Most Expensive Property Market
Year after year, property in Hong Kong is slipping farther off the reach of the common man. In fact, the latest edition of the Demographia International Housing Affordability Survey ranks the city the most unaffordable housing market in the world. This means that in comparison with an individual's income, property prices are way too high. You will be mistaken if you thought there could have been a sudden inflation in property prices-- Hong Kong has remained the most unaffordable property market in all seven surveys conducted by Demographia International.
Let us look at the key features of this property market where prices refuse to cool despite several measures implemented by authorities:
- Data show housing affordability in Hong Kong was much better in the early 2000's. According to The Chinese University of Hong Kong's' Quality of Life Index, the house price-to-income ratio rose 275 per cent between 2002 and 2014. Research shows property prices in Hong Kong have been driven largely by restrictive land-use regulation.
- Land in Hong Kong is state property and is only awarded on lease. The lease period can extend for up to 50 years. In tandem with the demand, land supply has also gone up in the recent years as the local government is seen actively selling land.
- People from any part of the world can invest in Hong Kong property market, except people from Afghanistan, Cuba, Albania and North Korea. Due to an absence of curbs on acquiring residential and commercial property in this semi-autonomous Chinese city so far, demand for Hong Kong property increased among overseas investors. This is also the main reason behind property prices hitting the roof.
- In November last year, authorities increased stamp duty to 30 per cent for foreigners in a move to cool prices. On the other hand, the stamp duty on property transactions for non first-time buyers was raised to 15 per cent for individuals and corporate buyers. The stamp duty doesn't apply to permanent residents buying their first homes.
- Hong Kong real estate is well-known for its luxury offering, but what qualifies as luxury? Any property spreading above 1,000 square foot is luxury property. Much of the demand for the luxury housing segment comes from main-landers, data show.