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An average Hong Kong family will need to save their entire income for 19.4 years before they can buy their own home at current prices, and they will still only be able to afford a tiny 130-square-feet apartment.

So it is little surprise that the city has again been ranked the least affordable city in the world for housing by Demographia, for an eighth consecutive year. Australia is the second-worst, with houses costing 5.9 times more than average incomes, then New Zealand (5.8), Singapore (4.8), the UK (4.5), Japan (4.2), Canada (3.9) and the US (3.7).

Demographia calculates market affordability by dividing the median house price by gross annual median household incomes. In Hong Kong the medium house price was HK$6.2 million (US$794,000) in 2017 and the average income was HK$319,000 (US$40,798), compared with the next most-expensive cities of  Sydney (12.9 times more than the average income), Vancouver (12.6) and San Jose in the US (10.3).

The price-to-income ratio has been steadily widening for years: it was 18.1 times in 2016 and 15.7 times in 2015. A ratio of five or above indicates that housing is extremely unaffordable; the only time Hong Kong fell below five was back in 2002, when the ratio was 4.6.

Of course this formula overlooks the fact that most people in Hong Kong will make a downpayment of 40% of the price for an apartment of HK$6 million to HK$10 million, thus limiting their mortgage to 60%. If this were taken into account, the median saving time would be halved.

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Prices are so high that yields have become notoriously low in the high-end luxury home market, making it more practical for the privileged to rent rather than buy. Unless you happen to be a legislator: Chief Executive Carrie Lam Cheng Yuet-ngor and Secretary of Housing and Transport Frank Chan Fan don’t own property in Hong Kong because they are career administrative officers and thus get a housing subsidy.

Some former government officials are finding it tougher. MTR Corp chairman Frederick Ma Si-hang, who was formerly Secretary for Financial Services and the Treasury, recently complained that he could not afford a home. Even if he did, he would not buy at this price level.

“If you buy for self-use and can afford it, you can buy. But you should also understand that the price is really high,” said Ma.

New units continue to roll onto the market, but buyers are becoming harder to find at the top end. The city’s biggest developer, Sun Hung Kai Properties, wants HK$102.8 million, or HK$64,858 per square foot, for four-bedroom units of 1,585 square feet at its Victoria Harbour complex in North Point.

Apartment prices there are so high that even a lottery winner, who got a windfall of more than HK$80 million (US$10.2 million), said he could not afford to buy his dream home.

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