Housing concerns in Hong Kong have become a prominent aspect of society. Many can never save up enough for the down payment or to afford their mortgage as prices continually skyrocket.

Adding onto Alex’s post, this is a marketing promotional and financial investment issue. As described in his post, housing prices are calculated using gross floor area which includes a lot of non-living space. This type of calculation creates such a great misrepresentation that has contributed to make HK one of the most expensive places for real estate. For example, an apartment with only 195 sq. ft. that is saleable (I like to call this “useable”) is sold according to its gross floor area of 298 sq. ft. This 52.8% distortion made a small, typical flat in a common neighbourhood even pricier in $/sq ft. than some of the flats in luxury residential areas!

People in Hong Kong live in metal cages

Coupled with the trend of investors to buy and sell real estate quickly to artificially drive up its value and gain profit, housing has become unaffordable. As these rich investors only represent a small group of the population, those at the other end have no choice but to rent “cage homes,” a bunk bed outfitted by a cage that is stacked up to four stories high in a small apartment.

The problem becomes apparent – the general public is paying for more than they get to live in, and devoting the rest of their life in paying off mortgages for artificial prices. In response, the government has finally taken action. To curb prices, they now require agents to state the useable area and have introduced stamp duties (the doubling of sales taxes on property to limit investing activity) to ensure fair pricing and increase the supply for genuine homebuyers. Hopefully, this will allow housing prices to level, and thereby improve the living conditions of people in HK.