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India Equity Research Reports, IPO and Stock News
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The traditional rule of thumb of housing affordability is a monthly
mortgage burden of 33%, that is one-third of monthly household income is
used to pay the mortgage installment. In China, Hong Kong, India and
Singapore, our affordability analysis shows monthly mortgage burdens
well in excess of this level and we highlight in this analysis the price
declines required to restore the historical mortgage burden norms in
various rate scenarios. This report is also an in-depth update to our
review of housing affordability in the region.
Affordability approach to housing prices provides a fundamental
view of housing prices. We find that median house prices in China,
Hong Kong, India and Singapore would need to fall 17-35% from
current levels and interest rates to bring the monthly mortgage burden (a
key housing affordability metric) down to 33%.
Hong Kong house prices – high base, stretched affordability. Price to
income ratio is at an all-time high of 15x on our calculations, with house
prices needing to fall 30% to reduce the monthly mortgage burden for the
median household from 47% to 33%. The Hong Kong housing sector is
likely to remain under a policy overhang whilst this extreme lack of
affordability persists, whilst higher mortgage rates would perversely
accentuate the necessary downward price adjustment.
The caveats: Housing affordability metrics are useful medium- to longterm
warning signals but provide little information on market inflection
points. This report goes into more detail about the additional perspectives
necessary to form a more complete picture of the state of housing
markets in the region (income inequalities, housing as a savings
instrument, etc).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The traditional rule of thumb of housing affordability is a monthly
mortgage burden of 33%, that is one-third of monthly household income is
used to pay the mortgage installment. In China, Hong Kong, India and
Singapore, our affordability analysis shows monthly mortgage burdens
well in excess of this level and we highlight in this analysis the price
declines required to restore the historical mortgage burden norms in
various rate scenarios. This report is also an in-depth update to our
review of housing affordability in the region.
Affordability approach to housing prices provides a fundamental
view of housing prices. We find that median house prices in China,
Hong Kong, India and Singapore would need to fall 17-35% from
current levels and interest rates to bring the monthly mortgage burden (a
key housing affordability metric) down to 33%.
Hong Kong house prices – high base, stretched affordability. Price to
income ratio is at an all-time high of 15x on our calculations, with house
prices needing to fall 30% to reduce the monthly mortgage burden for the
median household from 47% to 33%. The Hong Kong housing sector is
likely to remain under a policy overhang whilst this extreme lack of
affordability persists, whilst higher mortgage rates would perversely
accentuate the necessary downward price adjustment.
The caveats: Housing affordability metrics are useful medium- to longterm
warning signals but provide little information on market inflection
points. This report goes into more detail about the additional perspectives
necessary to form a more complete picture of the state of housing
markets in the region (income inequalities, housing as a savings
instrument, etc).
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