Hong Kong, Vancouver Least Affordable Home Markets, Survey Shows; The median home price in Hong Kong rose to 14.9 times gross annual median household income from 13.5 times last year

January 22, 2014 Leave a comment

Hong Kong, Vancouver Least Affordable Home Markets, Survey Shows

Hong Kong, Vancouver and Honolulu have the least affordable housing markets across nine nations in the Demographia International Housing Affordability survey.

The median home price in Hong Kong rose to 14.9 times gross annual median household income from 13.5 times last year, according to the 10th annual report by the Belleville, Illinois-based consulting company. Homes in Vancouver cost 10.3 times income and 9.4 times in Honolulu. Australia and New Zealand were the most unaffordable countries after Hong Kong, with home prices at 5.5 times gross income.The survey examined housing prices in 360 metropolitan markets in Australia, Canada, Hong Kong, Ireland, Japan, New Zealand, Singapore, the U.K. and the U.S. A reading of 5.1 or more is “severely unaffordable,” while below 3 is affordable.

Surging home prices across Hong Kong, Australia and Canada have raised concerns about bubbles in markets that top the Demographia survey. Hong Kong home prices have more than doubled since the beginning of 2009, driven by demand from mainland China and mortgage rates at record lows. In Australia, historically low central bank rates pushed home prices in the nation’s major cities 9.8 percent higher in 2013, and Canadian property prices are forecast to continue climbing this year.

“Land use regulations and the availability of trunk infrastructure heavily constrain the supply of developable land,” Alain Bertaud, senior research scholar at the Stern School of Business at New York University, wrote in the introduction to the report. “If planners abandoned abstracts and unmeasurable objectives like smart growth, livability and sustainability to focus on what really matters — mobility and affordability — we could see a rapidly improving situation in many cities.”

Ireland was the most affordable country for housing, with homes costing 2.8 times incomes. Rockford, Illinois, was the most affordable city across all markets, and Pittsburgh was the most affordable in cities with populations of more than 1 million, the survey showed. Except for the U.S., no country had cities with more than 1 million people where the median home price was less than three times income, according to the report.

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment