There are housing bubbles, and then there is Hong Kong. The city-state on China’s southern coast that has been called the world’s freest economy is not only the least affordable of all of the 87 major metropolitan areas recently surveyed by Demographia; it’s also the least affordable city that Demographia, in its 11 years, has ever seen, and thus probably the least affordable ever.
The survey found that the median housing price in Hong Kong was 19 times the city’s median income, up from 17 last year. The so-called median multiple puts Hong Kong in the category of “severely unaffordable,” along with any other metropolitan area where that figure tops 5.1. Sydney scored second (12.2), then Vancouver (10.8). Worst in the U.S. was San Jose, California (9.7), closely followed by San Francisco (9.4). New York City, its numbers presumably mitigated by less insane prices in Staten Island and the Bronx, was bad but not even close to the top, at 5.9. Among the brighter spots were Buffalo and Rochester (each 2.6) and Pittsburgh (2.7).
That said, prices in Hong Kong appear to have topped out, owing to a little not-so-free-market intervention. Facing a 370 percent increase from 2003 to September 2015, and following 2014’s “umbrella” protest, Hong Kong chief executive Leung Chun-Ying has introduced measures to slow the growth in home price, including a pledge to add 480,000 homes in the next ten years, a tax increase on foreign investment, and limits on loans. Since September, home prices in Hong Kong have dropped 8 percent. Maybe buyers will take the news as a pick-me-up.