Living in the world’s most-expensive property market means having to set aside more than half your income as mortgage payments. Hong Kong’s mortgage-payment-to-income ratio rose to 54.2 percent in June, the highest since 1998, figures from Centaline Property Agency show.
The low affordability is a result of the steep rise in home prices, which have kept soaring despite efforts by the city’s leaders to impose restrictions to cool the market. A gauge of existing home prices, Centaline Property’s Centa-City Leading Index, broke previous records Friday to reach 160.3. The index has climbed 11 percent this year and has surged more than 50 percent in the past five years.
Debt-to-income ratios have surged in Hong Kong despite the fact that borrowing costs are far lower now than they were two decades ago, with average mortgage rates that are less than half the level of 1998.
As the Federal Reserve follows on its path
of increasing interest rates and Hong Kong
follows suit, Hong
Kong Monetary Authority Chief Executive Norman Chan has urged potential homebuyers to consider the impact on mortgage payments.