Say what? It turns out the London doesn’t have the world’s most unaffordable homes – Hong Kong does
First-time buyers across the London may be struggling to get their hands on a property – but it turns out we don't have the world's most unaffordable homes.
That dubious accolade belongs to Hong Kong, where the average home is 19 times people's annual incomes – compared to just 8.5 times in London. Pah.
The figures were part of the International Housing Affordability Survey by US organisation Demographia, which said Hong Kong's multiple was "the highest recorded in the 12 years of the… survey".
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The survey ranks house prices which are three times average salary and under as "affordable", under four times salary as "moderately unaffordable", under five times salary as "seriously unaffordable" – and anything above that as "severely unaffordable".
The UK was ranked the world's fifth-most unaffordable property market, with average house prices coming in a 4.6 times average salary, after Hong Kong, New Zealand (9.7 times), Australia (6.4 times) and Singapore (five times). Homes in Ireland, meanwhile, cost about 4.5 times the average salary.
The report was strongly critical of cities' responses to housing issues.
"Corrective measures that could halt or reverse losses in housing affordability from urban containment policy have either been absent or not been implemented. As a result, urban containment policy has been a profound policy failure, as house prices have doubled and tripled relative to incomes in many metropolitan areas."
It singled out Singapore as an example of a city which is beginning to tackle its housing crisis successfully.
"Housing affordability for new houses appears to be [improving]… The Housing and Development Board, which accounts for approximately 90 per cent of housing… has increased production and reduced new house prices.
"Singapore has been far more successful in controlling housing affordability than in markets that have followed the British urban containment model. Housing affordability has virtually spiraled out of control in places like Hong Kong, Vancouver, San Francisco, San Jose, Sydney, Melbourne, Auckland and London."
Meanwhile, figures published by Hometrack last week showed house prices in London rose 13.8 per cent over the last 12 months – the highest rate of growth in 15 months. Ouch.