Hong Kong’s sky-high housing prices is a well-documented phenomenon – the city has had the world’s priciest homes for seven years running, and is the least affordable housing market globally.

And there’s no stopping the rise for the foreseeable future. JLL research shows that limited supply has pushed up prices.

Ingrid Cheh, Associate Director at JLL Hong Kong Research, says: “From a buyer’s perspective, the Hong Kong residential sales market remains supply-driven. With few choices in the market, a lack of incentive to buy in the secondary sales market and strong pent-up demand, newly launched flats continue to be gobbled up quickly.”

Against such a backdrop, capital values are expected to grow 10-15 per cent for 2017, even under the tightened mortgage rules and anticipation of increasing mortgage rates.

Housing Price Snapshop

• Hong Kong has one-room apartments offered for sale at $3 million
• The world's most expensive house, in dollar-per-sq-ft terms, has been on the market since 2012. The four-bedroom, four-bathroom, 4,120-sq-ft ‘beautiful British style townhouse’ at 110 Repulse Bay Road can be yours for $87.3 million, roughly $21,190 a square foot by Christies. 
• The K City development, being built at Kai Tak by the Hong Kong company K Wah International Holdings, has been selling for around HK$18,900 per square foot.  
• The Poly Property Group launched sales of its first residential development in the city with Vibe Centro, another Kai Tak project. It paid HK$3.92 billion ($500 million) for the site in 2014. Poly priced its units at close to HK$20,000 per square foot.
• In Shanghai, Mansion Global reports a townhouse has sold for $36.1 million, setting a unit price record, although it is nowhere near the most expensive home in China (a property in Suzhou currently on the market for $154 million USD) its price of $4,780 USD per square foot is the highest ever paid in the country.
• Knight Frank's latest Prime International Residential Index reveals $1 million will buy 46.2 square metres' worth of luxury property in Shanghai, but only 20.6 square metres in Hong Kong.

Hong Kong is hardly alone; many of the most expensive cities for local residents to buy a home are in Asia.

In Mumbai, a combination of limited land due to its geography, government policies and demographics have led to high residential prices. And homes in Chinese cities have been on an upward trajectory for the last five years; Beijing and Shanghai rank third and fourth in terms of the most expensive residential market in the world.

“Inventories in these markets are low and demand from genuine owner occupiers settling in these cities is huge,” says Joe Zhou, Head of Research JLL China. “Everyone wants to live in Tier 1 economic centers.”

To stem the inflation, Chinese government implemented cooling measures earlier last year, which have had limited impact although the latest data show the curbs are finally beginning to bite.

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