Hong Kong has been ranked yet again as the world’s least affordable housing market with social unrest failing to make any meaningful dent on home prices for most of 2019. That dubious honour is for the 10th straight year and is unlikely to be toppled in near future.

A family in the city would need to save up for 20.8 years to afford a home in the city, according to the annual Demographia International Housing Affordability Study, which ranks 92 major markets across the world based on median affordability scores. That has barely changed from 20.9 years in 2018.

Vancouver came in second at a distant 11.9 while Sydney took the third place at 11. Melbourne at 9.5 and Los Angeles at 9 made up the top five most expensive housing market in the study.

The score was generated by calculating the median house price over median household income, covering the third quarter of 2019, according to the Demographia statement.

“Over the past year, there has been moderation of house price increases in some of the least affordable major markets,” Demographia said in a statement on Monday. “However, the trends were insufficient to materially improve housing affordability.”

The latest study shows how Hong Kong’s home prices have remained sticky on the upside, reflecting the acute disparity in housing demand and supply which helped fan anti-government protests last year and stoke criticism from mainland media outlets during the spate of social unrest.

“The supply and demand imbalance still exists because supply is extremely limited,” said Buggle Lau Kai-fai, chief analyst at Midland Realty. “In the primary market, there is also some kind of limited supply because we expect the land sales to be even slower this year than last year.”

Some of the city’s biggest property developers including CK Assets and Sun Hung Kai Properties have offered discounts at new flat launches last year, while the government eased its mortgage rules to support wider home ownership.

Henderson Land, Wheelock Properties and Sun Hung Kai Properties are also among developers who have offered to loan their land bank for a token sum to help ease the public housing shortage in the city, helping the government assuage public discontent.

Hong Kong’s economy fell into a technical recession in the third quarter amid its worst political crisis in decades, and some property developers have offered discounts to buyers to clear their inventory. Average home prices in Hong Kong fell by a quarter last year, according to an analysis by Ricacorp Properties.

While property analysts have forecast prices to fall by a further 20 per cent this year, any decline from current lofty levels is likely to be short-lived, analysts at JPMorgan Chase said.



“In the first half this year, prices are likely to go down further but I think overall, prices shouldn't drop that much,” said Lau of Midland Realty. “In fact, if the social movement calms down a little bit, we expect prices to remain fairly steady, and there's a chance to increase slightly toward the end of this year.”

Elsewhere, Demographia categorised 31 cities with scores above 5.1 as “severely unaffordable,” a list that also includes Toronto, Auckland, San Francisco and greater London.

Below that rung is the “seriously unaffordable” category, which includes Singapore at 4.6. The 10 most affordable markets are all located in the US, it added, led by Rochester, Oklahoma City and Cleveland.