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