Hong Kong's Quality of Life Index dips as home prices soar
Annual survey finds widest-ever gap between cost of flats and average incomes amid mixed messages in press freedom indices
Hong Kong homes are the least affordable they have been in the past 10 years, according to the latest figures showing that private household income failed to catch up with soaring home price growth - and the trend is set to continue.
Chinese University's annual Hong Kong Quality of Life Index puts last year's housing affordability index at 12.76 - the highest since the first study in 2002, when it stood at 4.7.
That means a four-member family now has to spend nearly 13 times their annual income to buy a 400 square foot flat in an urban area.
"This is the worst-ever result we have found," said Ng Sai-leung, director of the university's Centre for Quality of Life. "Housing affordability in Hong Kong is far from realistic. It is almost impossible for ordinary people to purchase a flat."
The centre's index reading was calculated using official figures that show a 400 sq ft flat in an urban area costs an average of HK$3 million, with a typical family paying around HK$21,000 a month for nearly 13 years to buy such a flat.
Chong Tai-leung, an associate professor of economics at the university, said a housing affordability index should not rise beyond five - meaning that families should not have to spend more than five years of their total earnings to buy a flat.
"Let's say a family saves about one-third of their monthly income to buy a flat - it will take at least 30 years for them to reach that amount," he said.
