By Sakshi Kaushik November 27, 2014 / 18:21 HKT
According to the Bauhinia Foundation Research Centre, a think tank with close ties to Hong Kong’s former chief executive Donald Tsang, young couples will need to save for 14 years and four months in order to afford the downpayment for their first flat.
The report, which tracked the changes in housing prices, income and inflation over the last 23 years, details that they were significantly higher during that time period than in 1991, when couples only needed to save for eight years and eight months for the same ends. What a treat!
The study records the amount of time it would take to cobble together a downpayment for a 40-square-metre (430-square-feet) flat in the city, based on the average property price in a private residential unit and the average income of HKD29,000 per couple.
The report also found that the monthly mortgage payment accounts for more than 40 percent of the said income.
This comes as no surprise, as the latest survey by US consultancy Demographia names Hong Kong – out of 360 other places – as having the world’s smallest and most unaffordable housing scene for the fourth consecutive year.
To battle this social dilemma, the foundation has put forth a kooky idea: that the Hong Kong government reduce housing expenses by building hostels for young people to live in while they save for their own flats. If this is some sort of covert attempt to prolong university lifestyle, we’re totally in…. not sure if we could handle 14 years of drinking games and embarrassing hookups though.
In a separate survey conducted by HKU and sponsored by Citibank, youngsters aged 22–29 were found to be most keen to buy their own places. Thirty-two percent of those surveyed believe that in 10 years, they’ll be able to purchase a 600-square-foot unit costing roughly HKD4 million. Good luck with that, kids!
Despite having a well-educated workforce, with over 40 percent of high-end earners having tertiary level qualifications, Hong Kong is suffering a decline in employment opportunities, according to EJ Insight. This doesn’t help the fact that Honkers is already a horrendously expensive city to live in, with rising inflation and property prices continuing to surpass income growth.
Chairman of the Bauhinia Foundation, Dr Donald Li, fears that “this is harmful to social stability”, as young people will become disillusioned and lack the passion to move upwards in society.
The Foundation recommended that the government add more industries into its current apprenticeship scheme and increasing the age limit to allow people older than 19. Easing the repayment terms of student loans and creating better paid jobs also wouldn’t go amiss.
Speaking with the SCMP, vice chairman of the Foundation Lau Ming-wai says, “These are medium-term solutions aimed at helping young people step up. To target the problem of inflation and high housing prices, we would require further study to tackle the complex issues”.
That’s all good and well, Lau, but we’re definitely leaning towards reliving our college days in those hostels. Let’s hear it for communal homelessness until we can afford our own little cupboards!
Photo: Wikimedia
http://hongkong.coconuts.co/2014/11/27/think-tank-young-hongkongers-should-live-hostels-14-years-save-deposit-first-flat
