Hong Kong residents are forced to live in tiny ‘coffin homes’ after a dramatic rise in property prices, spelling bad news for both tenants and investors
- Hong Kong named as the most unaffordable major housing market in the world
- Huge rents have seen more people living in tiny, low ceilinged ‘coffin’ homes
- A 50% rise in property prices since 2012 makes it difficult to acquire new property.
Recently named the most unaffordable major housing market in the world, Hong Kong has seen a 50% increase in property prices over the last four years.
As a result of these skyrocketing property prices and rents, an increasing number of Hong Kong’s residents are resorting to living in ‘coffin homes’. With an average rental rate of $229 per month, these tiny, low ceilinged spaces measure just 20 sq ft, and see residents live closely alongside 30 or so neighbours.
An estimated 200,000 people are currently living in these so called homes, which have been described by the United Nations as “an insult to human dignity”.
Sze Lai Shan, a Social Worker with the Society for Community Organisation, commented: “Living in very space with polluted air and simple surroundings. They don’t even have enough room to stretch their bodies and such tight spaces may have many psychological and social impacts.”
This rise in Hong Kong property prices makes it difficult for tenants pay rent. As a result, authorities introduced a new 30% stamp duty tax on overseas investment purchases. Investors looking to buy property are now faced with vastly increased acquisition costs, with little potential for capital growth and return on investment (ROI) while landlords with existing rental properties will see a reduction in their yields.
As a result, Hong Kong has seen a reduction in foreign property investments, particularly from China, where investors are instead becoming increasingly attracted to UK property investments, especially after the Brexit vote, which saw the sterling exchange rate plummet and render UK property investments less expensive.