World’s Most Unaffordable Housing

For the fourth consecutive year, Hong Kong has won the title of world’s No.1 most unaffordable housing — and in very convincing fashion. The median cost of a flat in Hong Kong is HK $4.02 million (US $515,000), 14.9 times median annual household income of HK $270,000 (US $34,600). In contrast to that of other developed Asian countries, this “median multiple” in Singapore and Tokyo-Yokohama are just a mere 5.1 and 4.4 respectively. This 14.9 multiple is even more shocking according to the World Bank and United Nation guidelines for affordability — from 3 to 5 the categories are rated as moderate (3.1 to 4.0), serious (4.1 to 5.0) and severe unaffordability (5.1 and over). Faced with monolithic problem, the Hong Kong government has not done nearly enough to ease the burden for its citizens.

To date, 3.4 million or 48.8 percent of the population of Hong Kong live in government housing or government subsidized housing. On the surface, it seems a successful public housing program has facilitated upward social mobility and also rapid development of now-thriving new towns. However Hong Kong is still entrenched in a looming housing crisis that does not square with its economic affluence, as evidenced by a severe undersupply and high property prices and rents beyond the affordability of the general population. The number of applicants awaiting public housing at the end of June was a whopping 255,800 with an average wait time of seven years. Of these people, 130,000 were singles under the age of 60 – quadruple the equivalent figure of 30,000 applicants in 2005.

So where do these low-income individuals result to living during their wait for public housing? Well the “lucky” ones are trapped living with their parents and relatives in tiny Hong Kong flats. Wong Yik Mo, a 35 year old warehouse worker with a monthly income of HK $14,000, lives tryingly in a 500 sq ft apartment with five adults — his wife, older brother and parents. Seeing that his salary was above the HK $9,670 cap to qualify for single housing, he has undergone drastic action by forfeiting his job in order to escape. Such stories are increasingly common amid the acute shortage of low-cost housing and escalating property prices.

The even lesser fortunate of the less fortunate low-income individuals result to living in even tougher conditions. Mak, 72, has lived in a four-walled “coffin home” for the better part of a decade. Despite working hard 14 hour shifts as a janitor, he has been stuck in a purgatory of incredibly low income and a long waiting list for better public housing. Another coffin home resident said to a reporter, “I’m not even dead yet, but I’m already living in my coffin.” Nicknamed “coffin-home” or “cage homes” for their physical similarities, some 200,000 people live in this underbelly of Hong Kong. Through Mak’s eyes, there are two distinct Hong Kongs: “the one seen through his only window, personified by the glitz and glamour the city is famous for. And on the inside, that has allowed less fortunate citizens to fall through the cracks.”

A typical cage home with barely room to sit up straight                      Source: The Globe and Mail

The problem of affordable housing is just one of many that represent a much larger issue of an extreme wealth gap. Monthly wages have only increased 30% in the past 10 years which pales in comparison to a 60% jump in Hong Kong GDP and a shocking 140% increase in housing prices over the same time period. Younger generations are gravely discontented because they don’t see any prospects of affording a home. The attempt to tackle housing affordability is noble, but the Hong Kong government is side stepping the root of the problem that lies within a structural inequality for property sector tycoons. Three companies account for 72% of the residential property market in Hong Kong – without greater market competition, the “tycoons are seen as gaming an unfair system in their favor.”

141106020852-chart-residential-data-620xa

Housing Prices in the past decade (Source: Money CNN)

Underlying the recent demonstrations in Hong Kong is a voice that says strongly – despite the growth and development that the business elite have brought to Hong Kong, the process has created a very unequal society. The public dissatisfaction stems from a lack of voice in the city state for the typical Hong Kong citizen and the people are demanding a bigger say in what affects their lives. The Hong Kong government needs to tackle this problem and show the Hong Kong people that they care about not only the rich, but all the citizens regardless of status. As one Hong Kong citizen puts simply, “It’s not that the H.K. government can’t help people like me who are part of the low-income society and need help, it’s that they don’t want to help people like us and solve problems like this.”

References:

http://money.cnn.com/2014/11/06/news/economy/hong-kong-income-inequality/

http://www.scmp.com/property/hong-kong-china/article/1410730/hong-kong-ranks-worlds-no-1-most-unaffordable-housing?page=all

http://www.cnn.com/2011/WORLD/asiapcf/07/25/hongkong.coffin.homes/

http://en.wikipedia.org/wiki/Public_housing_in_Hong_Kong

http://www.scmp.com/lifestyle/article/1633546/high-rent-low-salaries-how-young-hongkongers-are-scheming-secure?page=all

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2 Responses to World’s Most Unaffordable Housing

  1. Brian Cassey says:

    … I have noticed that you are using my © image (above) … with caption “A typical cage home with barely room to sit up straight – Source: The Globe and Mail” … incorrectly sourced … and … without my permission or a relevant licence or payment of fee. Please explain (urgently) how this came about and advise what you intend to do about the blatant disregard of my copyright and use of this image. Brian Cassey

  2. Brian Cassey says:

    … are you going to afford me the courtesy of a reply ??? You are using my COPYRIGHT image © … and it is even incorrectly ‘sourced’ !!!!!! I demand an explanation and a reply to my earlier email …
    Brian Cassey

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