Covid-19 Worsens Crisis in Hong Kong Housing Market

In Hong Kong the world’s most unaffordable housing market -- rents are staying exorbitantly high despite the global pandemic and a severe recession, threatening to add a new source of discontent after months of political turmoil. Hong Kong’s economy is forecast to shrink as much as 8% this year and its unemployment rate is near a 15-year high at around 6%. Yet, home rents remain one of the world’s most expensive while pulling back about 9.2% in August from the previous year. High rents combined with the surge in joblessness are making it harder for blue-collar workers and those on the fringes of poverty to find and hold on to even meager living spaces. Housing inequality has long been a hot-button issue in Hong Kong, where tens of thousands live in tiny subdivided flats that are sometimes so small they’re called cage-homes. The added housing difficulties fueled by the pandemic put further pressure on the administration of Chief Executive Carrie Lam, which is struggling to regain the trust of millions after the imposition of a national security law that’s tightened Beijing’s grip on the city. A Hong Kong government representative said its departments are doing their best to support street sleepers through non-governmental organizations, hostel rooms and provisions for other necessities like haircuts, meals and bathing. The social welfare department has also added measures to broaden assistance to the unemployed during the pandemic, the government said. In a mid-year study, real-estate services provider CBRE Group reported that Hong Kong remains the world’s most expensive place to buy a property. Monthly average rents in the city stayed the world’s third highest after New York and Abu Dhabi. Hong Kong’s rents were estimated by CBRE to be 7% below New York’s last year, but they are more unaffordable because Hong Kong’s median income is just 35% that of New York’s. Abu Dhabi ranks high because of expats who pay high rents for large homes, although locals benefit from government subsidized housing. In Hong Kong, the number of “street sleepers” approached by non-government organizations rose to 1,423 during the period April 2019 to March 2020, from 1,297 in the previous year, according to a spokesman for Social Welfare Department. While that reflects the number helped by the nonprofits, it doesn’t count all of those without homes in Hong Kong. Hong Kong’s government is also seen to be doing less to help protect renters compared to other big cities. In the US, the Centers for Disease Control and Prevention have temporarily halted residential evictions to prevent the spread of Covid-19, while in London, the mayor has called for a two-year rent freeze in the capital. Despite the drop in Hong Kong’s overall private residential rents in the past year, the plight of the underprivileged didn’t improve. The average rent for a bed space of 18 square feet rose 15% in August from a year earlier, according to a recent report by Society for Community Organization, a non-profit group.