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That's true in the US. In other areas, leaving the city might not be a realistic option. Consider Hong Kong as an (extreme) example, where leaving the city mea
by ddeck 9y ago
That's true in the US. In other areas, leaving the city might not be a realistic option.
Consider Hong Kong as an (extreme) example, where leaving the city means emigrating to another country with another language etc. (yes, HK is technically a Special Administrative Region of China, but can be considered standalone in this respect).
The median apartment price/income ratio here is 18, compared to a US average of 3.9 (the highest cities in the linked article are 13) [1].
These ratios also don't consider what you actually get. The average size of new apartments sold this year in HK was 610 square feet at an average price of US$1.8m and one new development offers apartments the size of Tesla Model X for ~US$500,000 [0].
If you want to go larger, the per square foot cost goes up. At the extreme end, consider a 4000 square foot townhouse that costs US$21,190/square foot [2].
A more ridiculous example is perhaps the sale of a car park earlier this year for US$600,000.
For reference, the median household income is ~US$38k. [1]
Unfortunately those with the most housing affordability issues are those that are least capable of leaving.
[0] https://www.bloomberg.com/news/features/2017-06-14/you-can-barely-squeeze-a-tesla-into-this-500k-apartment https://www.bloomberg.com/news/features/2017-06-14/you-can-b...
[1] http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf
[2]http://time.com/4752342/worlds-most-expensive-house-square-foot-hong-kong/ http://time.com/4752342/worlds-most-expensive-house-square-f...
- zaroth 9y agoSeems like solid evidence that you can't simply "densify" your way out of high prices? Bloomberg says the reason is developers trying to cover the cost of land. Something doesn't add up...
- smallnamespace 9y agoActually HK has plenty of buildable land in the New Territories and elsewhere, but the real estate tycoons that run the whole show obviously aren't going to allow competition without first getting their cut.
- ignoramous 9y agoAlso, doesn't HK have a policy against tearing down green spaces? Astonishingly, 70% of the dragon islands is forest, the last I read.
- anovikov 9y agoWhich means that probably ordinary people left Hong Kong and commute to work there each day right? It became like Paris where mostly only upper class lives. Definitely a rent on a minimal $500,000 apartment will also be above median household income.
- em500 9y agoNo, ordinary people live in government subsidized housing (about half the population), or bought their apartment (99%+ of housing are high-rise apartments) in earlier decades when it was a bit more affordable. For household who already own, their existing apartment also appreciated, so what matters is the cost of trading up. The hardest hit group are younger people between 20 and 35 who are stuck in their parents house for probably forever. 3 generations under 1 roof is pretty common.
- dis-sys 9y agoThe real problem of HK's home affordability is the land release/auction system. It is a highly corrupted system controlled entirely by the local elites and major real estate developers backed by big banks. They managed to push average joes to the very limit when 90%+ of the land in HK is used for reserves/parks under the name of environmental protection. What is worse, this cancer got exported to mainland China in the 1990s and it was systematically rolled out for all major cities there. $1.8m buys you an 80sqm new apartment in Shanghai in an below average location, when the median household income in Shanghai is definitely lower than US$20k. It is lucky to be living in HK as there are still public housing options. In cities like Shanghai and Beijing, using the national household median income figure, a Chinese peasant needs to start saving the deposit from the Ming Dynasty (1368–1644) to be able to afford an average apartment there.
- pas 9y agoSacrificing parks for more housing just creates more pressure for sacrificing even more parks.
- peterburkimsher 9y agoI would really like to see similar graphics for Europe, Asia, Australia, and Canada. I don't know where to get the data though, and I don't think I could make such a beautiful visualisation as he did.
- ddeck 9y agoFor the data, the Demographia International Housing Affordability Survey provides affordability data for many countries and cities: http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf The top 10 least affordable with respect to median price/income ratios: China Hong Kong 18.1 Australia Sydney, NSW, 12.2 Canada Vancouver, BC 11.8 N.Z. Auckland 10.0 U.S. San Jose, CA 9.6 Australia Melbourne, VIC 9.5 U.S. Honolulu, HI 9.4 U.S. Los Angeles, CA 9.3 U.S. San Francisco, CA 9.2 U.K. Bournemouth & Dorset 8.9
- mobiletelephone 9y agoWait... Bournemouth and Dorset!?!?
- epicalex 9y agoYep, Sandbanks brings the average up http://www.rightmove.co.uk/house-prices/Sandbanks.html http://www.rightmove.co.uk/house-prices/Sandbanks.html
- andyjohnson0 9y ago"Sandbanks has, by area, the fourth highest land value in the world" https://en.wikipedia.org/wiki/Sandbanks https://en.wikipedia.org/wiki/Sandbanks