January 23, 2018
Skyrocketing home prices in Hong Kong: The cost of not innovating
There are many reasons why property in Hong Kong remains among the most expensive in the world. But bringing in modern building methods and re-designing the approvals process could reduce costs significantly, says John Webb, Market Director, Built Environment, Asia at Aurecon.
According to news reports, Hong Kong’s property prices hit a high of HK$20,600 per square foot (or US$28,400 per square metre) in October 2017 for its western and central regions. This is an eye-watering 14.4 per cent increase from the same time the previous year.
The picture is not any better from an affordability point of view. Hong Kong was recently ranked the most expensive housing market in the world for the seventh consecutive year, according to the annual Demographia International Housing Affordability Survey.
The survey, which divides median house prices by gross annual median household income, found Hong Kong to be leading at 18. So, on average, if someone makes $50,000 in annual income, their home would cost $900,000. In contrast, Sydney rings in at 12, Greater London at about 9, and Singapore at 5.
There is an assumption that Hong Kong’s property prices will continue to dominate global “most expensive” lists because of its perfect storm of limited land supply; a densely packed population; and strong ongoing demand. While these are strong contributors, there’s another significant factor which is often overlooked: the cost of construction.
For full story, please refer to Building Journal January 2018 issue. Subscribe Building Journal E-version <click here>