We are used to hearing about the housing crisis in the UK, and the fact that the sharply rising population has caused a huge shortage of affordable properties. But what about elsewhere in the world?
Hong Kong Rooms Size of Toilet Cubicle
It has recently been found that Hong Kong’s housing crisis is much worse, with people living in rooms around the size of a toilet cubicle within massive tower blocks.
In 2012, property prices in Hong Kong rose faster than any other country, and now it will cost about $8 a month for every square foot of space in your home.1
House prices in Hong Kong have tripled since 2009, partly due to a splurge by overseas property investors, particularly from China. The availability of low cost mortgages has also been sparse.
Now there is a huge lack of housing available, meaning that the properties bought in 2009 have now increased in value so much that many of those living in Hong Kong can no longer afford to live in any other accommodation than the tower blocks.
However, some have predicted that there will be a peak in the Hong Kong property market soon. This is expected to stem from the Chinese Government trying to limit the gains on these properties, and the banks increasing home loan rates by 25 basis points, following new stricter risk regulations.1
Chairman of John Swire & Sons Ltd, James Hugh-Hallett, believes that the continuous price gains in the Hong Kong housing market will lead to a “competitive disadvantage” and that property controls enforced by Hong Kong Chief Executive Leung Chun-Ying make sense.1
Hugh-Hallett adds: “We’re at the very top of the market for our global comparison. If you look at the price equivalent you pay in New York, Paris, London, Tokyo, there should be a price ceiling somewhere very soon.”1
Investors with overseas properties in Hong Kong should be aware of the changes that will soon arrive in the housing market, particularly as the rules could change regarding renting, and the amount of potential profit from buying and selling homes. It could also have an impact on overseas property insurance, and rent income and property tax.