Hong Kong flat prices more than twice those in 1997

Finance chief issues warning on deteriorating affordability levels in the Chinese SAR

Kowloon Bay, Hong Kong. leungchopan/Shutterstock

Residential property prices are still mostly “out of reach for Hongkongers” due to higher debt-to-income ratios and escalating housing prices, warned Hong Kong Financial Secretary Paul Chan Mo-po via the South China Morning Post.

The cost of buying a flat in Hong Kong has increased by 126 percent since the housing boom of 1997, just before the financial crisis, Chan said in a Legislative Council panel discussion on Monday.

Around 69 percent of monthly incomes in the city went to repaying mortgages in the first quarter, compared with a high of 93 percent in 1997.

“The government will monitor the property market closely,” Chan was quoted as saying.

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The Post went on to report that overall prices in Hong Kong rose every month between January and April: up 9 percent on last December.

The period still saw 5,400 transactions on average per month, up 82 percent from Q4 2018.

Family arrangements, in which parents buy a property for children who then had to repay the loans with a bulk of their income, could partly explain the high mortgage-to-income ratio in Hong Kong, according to Mo Pak-hung, an economics professor at Baptist University.

Around 18,800 private flats are expected to come online in the city in the next five years — 20 percent more than the number for the previous five years.