According to the Census and Statistics Department of Hong Kong, the median salary for an employee is S$16,200 (RM8,114) in 2016. Please refer here for the full set of numbers. In other words, most employees in Hong Kong would be earning around RM100,000 per year which is already categorised as the upper end of M40 in Malaysia. The cost of living in Hong Kong, minus the property part is actually okay. Food, transportation and even the occasional Happy Hour is accessible to most people. Property is however something which has spiralled out of control and even all the cooling measures have failed to dampen the mood for properties. According to US planning consultancy Demographia, Hong Kong is ranked the least affordable city in the world for the eighth successive year. It leads even cities from the US, China, Singapore, UK and Japan. Here’s that survey by Demographia for download.
The survey follows a typical standard used by even our very own Bank Negara Malaysia (BNM). When the median multiple between yearly income versus house price is 3 or below, it’s considered affordable. In between, there’s moderately unaffordable, seriously unaffordable and lastly severely unaffordable once the median multiple is 5.1 or higher. There are no special ratings even when the median multiple hits double digits. Try and use your current home price divided by your current annual income. Compare the median multiple to the chart by Demographia. If it’s low, congratulation, you may be earning a higher income than most other Malaysian professionals or you are staying in a home which is cheaper than most other properties.
Some other summaries from the Demographia survey? Please refer to the chart. Chart shows that after Hong Kong, the next few least affordable cities include Sydney (Australia), Vancouver (Canada), two U.S. cities followed by Melbourne in Australia. Many more U.S. cities followed before London, two cities in New Zealand followed by two more Australian cities. There’s no need to look for Singapore, it’s nowhere near all these cities here and in fact the median multiple is only 4.8 which meant it’s only categorised under ‘serious unaffordable.’ I think the median multiple is also not applicable to Singapore citizens who are able to get subsidized HDB flats when they qualify for one. The survey also concluded that in many situations, the government is the one who could directly influence the direction of more affordable homes. This is because it is able to influence through policies as well as constructing more affordable homes; more supply. Full report for download of the comprehensive report by Demographia here. Happy following.
written on 22 Feb 2018
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