Hong Kong Remains the World's Least Affordable Housing Market Despite Falling Prices

A typical home still costs 14.4 times household income

Hong Kong has ranked as the world's least affordable major housing market for the fourteenth consecutive year, even as falling property prices have narrowed the gap between home costs and household earnings. The 2025 Demographia International Housing Affordability report puts the city's median home price at 14.4 times its median annual household income before tax.

The assessment, released by the Chapman University Center for Demographics and Policy, covers 95 major housing markets across eight nations using figures from the third quarter of 2024. None meets its definition of affordable housing. Twelve fall into its most expensive category, described as impossibly unaffordable.

Hong Kong's ratio has fallen from 16.7 in the previous edition and 20.8 in 2019, before the pandemic. Softer home prices and a gradual recovery in incomes have helped bring it down. Yet a typical property still costs more than fourteen years of a typical household's income before taxes or everyday expenses are paid.

Pittsburgh, the least expensive market in the comparison, has a ratio of 3.2. Even that falls into the moderately unaffordable category. For the first time in the survey's two decade history, no major market has reached its affordable threshold of 3.0 or below.

Hong Kong's improving ratio therefore sits alongside continuing pressure on buyers and renters. More homes are being completed, transactions have increased, and the government has removed several buyer stamp duties and relaxed mortgage stress tests. For households with limited incomes, however, the cost of securing a suitable home remains far beyond reach. Some face a more immediate problem: living through increasingly hot summers in cramped rooms with poor ventilation.

What the affordability ratio means

Demographia uses a measure called the median multiple. It divides the median home price by the median household income before tax. The median is the middle value: half of the homes or households sit above it and half below.

A market where the median home costs 300,000 and median annual household income is 75,000 would have a multiple of 4.0. Under the report's categories, a multiple of 3.0 or less is affordable, while 9.0 or more is impossibly unaffordable. Hong Kong's 14.4 places it well beyond that upper threshold.

The ratio changes when either prices or incomes move. Lower home prices can reduce it, as can higher household earnings. Mortgage payments may still feel heavy even when the ratio improves, because the comparison measures the price of a home against income rather than the monthly cost of financing a purchase.

Each market in the study follows a labor market or commuting area, rather than covering only a city center. That allows the assessment to compare home prices and earnings across the area in which people typically live and travel to work.

National averages can hide large differences within a country. A metropolitan area with a flexible land market can have a very different price to income ratio from one where expansion is tightly restricted. The report's focus on individual housing markets makes those local differences visible.

Why falling prices have not removed the squeeze

Hong Kong's housing pressures combine limited developable land, decades of tight control over land release and persistent demand. Much of the territory is mountainous or preserved as country parks, leaving a compact urban footprint in which households compete for space.

Local and overseas capital also seek property as a store of value. Demand comes from people looking for somewhere to live and from buyers seeking somewhere to hold their wealth. The balance between supply and demand has rarely favored people purchasing their first home.

The government owns all land and controls its release through leasehold sales to developers. Under that system, developers acquire rights to use land through leases. Revenue from land funds a large share of public services, giving officials a financial incentive to manage supply carefully.

Planning rules and height limits in some districts also restrict the amount of new housing that can be built. Research linked to the Demographia study argues that urban containment policies, including growth boundaries and green belts, create artificial scarcity and push up land values near regulatory boundaries. Such policies limit where a city can expand.

Joel Kotkin, director of the Center for Demographics and Policy at Chapman University, argues that decisions about outward growth are central to explaining high housing prices.

These high prices are largely the product of policies that seek to limit growth on the periphery, which has been the usual way that cities have grown.

Hong Kong already faces physical limits on development. Further restrictions on new supply around the edges of its urban areas can affect prices across the housing market, because households and developers compete for the space that remains available.

More completions and sales, but a large price gap

Hong Kong's official home price index fell by about 7.8 percent from a year earlier in the first quarter of 2025. That marked the thirteenth consecutive quarter of annual declines, extending the price weakness behind the improvement in its affordability ratio.

Housing completions surged by more than 75 percent in 2024. Sales in the primary market, where buyers purchase newly developed homes, rose by more than a third. Transactions in the secondary market, involving existing properties, also increased.

The government removed several buyer stamp duties and relaxed mortgage stress tests to revive demand. Stamp duties add to the tax cost of a purchase. Mortgage stress tests assess whether borrowers could continue paying their loans under more demanding financial conditions.

Average gross rental yields rose to around 3.9 percent late in 2024. Gross yield compares annual rent with a property's value before expenses are deducted. That figure describes the relationship between rent and the price of a property, while households experience the market through the amount they must pay to buy or rent a home.

Hong Kong's multiple fell by 2.3 points from the previous edition's 16.7 to 14.4. Compared with 2019's 20.8, the reduction is 6.4 points. Those changes show a substantial narrowing of the price to income gap, although the city remains the least affordable market in the comparison.

The key dates show how the latest ranking fits into the longer change:

• 2019: Hong Kong's median multiple stood at 20.8 before the pandemic.
• 2024: Housing completions rose by more than 75 percent, and primary market sales increased by more than a third.
• Third quarter of 2024: The period measured in the 2025 Demographia report put Hong Kong's median multiple at 14.4.
• First quarter of 2025: The official home price index recorded an annual decline of about 7.8 percent, its thirteenth consecutive quarter of annual falls.
• 2027 to 2028: The government's target period for providing about 30,000 light public housing units.

Cramped homes face a hotter summer burden

An estimated 220,000 Hong Kong residents live in subdivided units, cage homes or rooftop structures. Many of these homes are small, windowless or poorly ventilated. Residents commonly share bathrooms and kitchens.

Thin walls and tin roofs can trap heat well into the night during the hottest months. For people living in those spaces, high housing costs affect more than the possibility of buying a property. They also shape sleeping conditions and exposure to heat, with particular health risks for older residents and children.

Sze Lai Shan, deputy director at the Society for Community Organization, supports households with low incomes and has documented conditions in these units for years. She describes the severity of some of the accommodation.

Some of the conditions are quite inhumane.

The Hong Kong Observatory recorded 52 very hot days in 2024, a record number. Each reached 33 degrees Celsius or above. Surveys of people living in subdivided flats point to widespread sleep problems, skin conditions, dizziness and emotional stress during summer.

Community workers describe families rationing meals to keep air conditioners running. Older residents spend daytime hours in libraries to stay cool. For these households, the housing squeeze and the cost of coping with heat become part of the same daily budget.

Large projects promise homes over a longer period

The government has identified the Northern Metropolis and Lantau Vision Tomorrow as major sources of future housing supply. Together, their stated ambitions amount to more than 1.1 million homes over time.

The Northern Metropolis plan, near the Shenzhen border, aims to create a new urban cluster with more than 900,000 homes. It combines housing with integrated transport and new employment centers, connecting the provision of homes with the places where residents would work and travel.

Lantau Vision Tomorrow proposes artificial islands intended to accommodate more than 200,000 homes. Both projects could reshape Hong Kong's development map, but their costs, engineering challenges and long construction periods mean they will not ease immediate housing pressure.

No specific delivery dates for those two large projects were given. Their housing ambitions sit alongside measures intended to provide accommodation sooner, including a target of about 30,000 light public housing units by 2027 to 2028 and more than 21,000 transitional units already lined up.

Rising construction completions and easier mortgage conditions point to greater housing market activity. The practical test for households is whether the homes delivered are priced at levels they can afford, rather than simply whether the total number of units increases.

Land costs and access to public housing

Wendell Cox, the author of the Demographia study, cautions that greater density alone cannot close the affordability gap for typical families when land remains expensive and new supply at the urban fringe is blocked. Building more homes within a small area still leaves the cost of the underlying land as part of the price.

David Leis, president of the Frontier Centre for Public Policy, links housing affordability to the wider pressure on household budgets. He argues that housing has been the main force behind the current cost of living crisis for middle and working class households.

The deterioration of affordable housing has been the principal driver of the present cost of living crisis affecting the middle and working classes.

Public housing rules are another part of the debate. Michael Wong, an economics professor at the University of Hong Kong, has criticized retention rules and the slow turnover of subsidized flats. His argument is that these arrangements leave new applicants waiting in the private rental market.

Wong places responsibility for that problem on public housing policy.

This is purely a failure of public housing policy.

The issues involve both the creation of homes and access to them. Land release, infrastructure, faster public housing delivery and a pipeline of private homes priced for typical earners all form part of the response described in the affordability debate. For an applicant waiting for subsidized accommodation, the movement of existing flats through the system also matters.

How Hong Kong compares with other markets

Sydney follows Hong Kong among the least affordable markets, alongside several cities on North America's West Coast. These places combine strong demand with geographic or regulatory limits on outward growth. Several have home prices exceeding ten times median household income.

The ten markets listed at the expensive end of the comparison have the following median multiples:

• Hong Kong: 14.4.
• Sydney: 13.8.
• San Jose: 12.1.
• Vancouver: 11.8.
• Los Angeles: 11.2.
• Adelaide: 10.9.
• Honolulu: 10.8.
• San Francisco: 10.0.
• Melbourne: 9.7.
• San Diego: 9.5.

Hong Kong's 14.4 is 0.6 points above Sydney's 13.8. Against Pittsburgh's 3.2, Hong Kong's home price to income ratio is 4.5 times as large. That comparison shows how much further a typical household income stretches in the least expensive market surveyed.

All ten markets listed exceed Demographia's 9.0 threshold for impossibly unaffordable housing. Across the full assessment, twelve markets are in that category, while none of the 95 qualifies as affordable.

Buying and renting across Asia Pacific

The Urban Land Institute's Asia Pacific Home Attainability Index uses a different benchmark: a purchase is attainable when a home costs no more than five times median household income. Its 2024 assessment puts Hong Kong apartments at about 23.4 times median income, the worst score in the region.

Demographia's 14.4 and the Urban Land Institute's 23.4 come from different yardsticks. Both describe a large distance between household earnings and the cost of purchasing a home. The Urban Land Institute's figure for Hong Kong apartments is more than four times its threshold of five.

Renters face substantial pressure too. A separate global study by DWS estimates that renting a typical apartment with two bedrooms in Hong Kong takes about 61 percent of household disposable income, one of the highest burdens worldwide. Disposable income is the money households have available after taxes, so such a rent bill leaves a limited share for food, transport, utilities and other needs.

Singapore and Tokyo show a different picture within the region. Singapore's public housing model keeps the purchase price of many Housing and Development Board flats within reach of typical incomes. Tokyo's large rental stock holds average rent near 17 percent of income in its core wards.

The regional comparisons connect the cost of buying with the availability of other housing options. Hong Kong has recorded falling property prices and more construction, yet renters and prospective buyers still face intense pressure. Across the largest business hubs, purchasing a home remains out of reach for most young families.

The Bottom Line

• Hong Kong ranks as the least affordable major housing market for the fourteenth consecutive year, with a median multiple of 14.4 in the 2025 Demographia report.
• The report measures the third quarter of 2024 and covers 95 markets across eight nations. None is affordable, and twelve are rated impossibly unaffordable.
• Hong Kong's multiple has fallen from 16.7 in the previous edition and 20.8 in 2019, helped by softer prices and recovering incomes.
• Housing completions rose by more than 75 percent in 2024. The official price index fell about 7.8 percent annually in the first quarter of 2025.
• The Northern Metropolis and Lantau Vision Tomorrow envisage more than 1.1 million homes together, but their long construction periods limit immediate relief.
• The government targets about 30,000 light public housing units by 2027 to 2028 and has lined up more than 21,000 transitional units.
• An estimated 220,000 residents live in subdivided units, cage homes or rooftop structures, where heat and poor ventilation add to housing hardship.
• DWS estimates that a typical rental apartment with two bedrooms absorbs about 61 percent of household disposable income in Hong Kong.