Hong Kong Properties Are Seriously Unaffordable For Millennials
Hong Kong people would agree that the dream of owning a home is challenging for most millennials. On top of the land shortage, the increasing cost of living has taken away millennials’ dream to save up for their dream home. Even though this news wouldn’t surprise many people, how bad has the situation become? According to the annual Demographia Housing Affordability Survey, Hong Kong is the most expensive city to live in - 10th consecutive years! The status is unlikely to be toppled soon. A Hong Kong family would need to save up for almost 21 years, which is around twice the time needed for the runner ups, to afford a home in the city. What’s worse? Our Hong Kong Foundation, a think tank established by former chief executive Tung Chee-Hwa, predicts the average flat size will contract further to less than 430 sq. ft in the next few years, accounting for 45 percent of private housing supply in 2019. Imagine a 400 sq. ft space is roughly the size of a typical two-car garage - there is barely any wiggle room left with a kitchen, bathroom, and a single-bed mattress!
These conditions not only have caused bad living standards for millennials but their financial status is also in a tough situation. According to Numbeo (a research and data site), a single Hong Kong person's monthly cost is no less than HKD 8,000. With an average monthly rent of more than HKD 10,000 for a 400 sq. ft flat, millennials might only have a few thousand left for savings. With all the increasing expenditures for daily necessities and expensive living costs, millennials barely save any to invest in Hong Kong real estate. It is time to rethink, “Is there a better place to invest in real estate?”, and “Is Hong Kong suitable for real estate investments?”
With social unrest and the COVID-19 pandemic, Hong Kong millennials grow interests in Southeast Asian real estate markets, such as the Malaysia real estate market and the Vietnam real estate market. They feel Southeast Asian countries have a better economic environment, while barriers to participating in real estate investing are lower than most emerging markets. According to Global Property Guide, the average price per sq. ft in Hong Kong is HKD 20,570, while average prices per sq. ft in Malaysia and Vietnam are HKD 2,480 and HKD 1,643. Purchasing a Hong Kong property costs almost ten times more expensive than that in other Southeast Asian countries! No wonder that Hong Kong millennials have decided to look elsewhere.
Hong Kong millennials must realize that there are plenty of real estate investment opportunities outside of Hong Kong waiting for them to discover. With the rise of PropTech, investors can now be more accessible to global real estate investment opportunities and have a better-informed decision to put their hard-earned savings to work. With platform such as Denzity.io, investors can focus on what matters most: getting a better sense of where, what, and how to invest in real estate worldwide that they have never thought of before effortlessly.
More about the author: Darren is the founder and CEO of Denzity, a PropTech startup aiming to make the world of real estate more accessible to everyone. If you are interested in becoming a regular PropTech author, please reach out at info@proptechinstitute.org
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