Recent findings rank the least affordable place to buy property in the world.
It has been revealed that Hong Kong is the most expensive place to buy property in the world. This is the seventh year that Hong Kong has topped the global rankings.
This is according to findings in the Demographia’s International Housing Affordability Survey who have just released their 13th edition of their report. In order to rank affordability, they calculate each country’s ‘median multiple’. This is worked out by dividing the average house price by the average household income. Any score in excess of 5.1 is considered to be ‘severely unaffordable’. In 2016 Hong Kong scored 18.1. Therefore the price of property is 18.1 more times than the average annual income, although this is a slight decrease from its score of 19 in 2015.
Hong Kong’s government have been taking measures in order to cool the market. Similar to those that have taken effect in Singapore, in Hong Kong these measures have included rising taxes and penalising foreign investors or those looking to purchase a property who do not fall under the first time buyer category.
Second in the ranking is Sydney with a score of 12.2. This is followed by Vancouver with 11.8, Auckland with 10 and San Jose scoring 9.6.
As the Yuan is still weakening, many Chinese are looking for opportunities outside of the Mainland China. Property continues to be an attractive asset forming part of people’s investment portfolios. However the news of Hong Kong’s staggering values may deter buyers, which could be to the benefit of other markets across the region.