Hong Kong graduates hit by lower wages and rising property costs

Compared with 20 years ago, young graduates face a much greater struggle buying flats, which some fear could stall social mobility

August 16, 2016
Residential apartments in Hong Kong
Source: iStock
Residential apartments in Hong Kong - out of reach for many graduates

Hong Kong university graduates have been hit by falling real wages and skyrocketing property prices in the territory compared with 20 years ago, according to a report, raising fears that difficulties buying property could stall social mobility.

Similar fears have been raised about London: high rents and house prices are blamed for locking out graduates who do not enjoy wealthy or London-based parents.

According to a report released by the New Youth Forum, a Hong Kong political party, inflation-adjusted monthly wages for graduates in their early twenties fell from HK$16,371 (£1,627) in 1995 to HK$13,916 in 2015, although the 2015 figure is a small increase from the HK$12,978 earned 10 years earlier.

In addition, the price of a square foot of property in 2015 cost more than 70 per cent of an average monthly graduate salary, compared with just 30 per cent in 1995, according to an article about the report from the Hong Kong Free Press.

“Purchasing property for each generation is getting more and more difficult as the days pass,” according to the study.

It also quoted Hong Kong Polytechnic University lecturer and political columnist Chan Wai-keung, who warned that high property prices could entrench social class.

If parents are from the “grassroots” class, he said, “even if their children work in professional occupations, it will be hard for them to buy property”.

Last year, social mobility thinktank the Sutton Trust warned that graduates without family wealth or a London home were being disproportionately priced out of the UK capital, and therefore top jobs. The problem was likely to worsen as too few homes were being built, it said.

“The housing affordability crisis has important implications for social mobility: poor quality housing; too little income left over after paying housing costs; the effects of reliance on parents and the imbalance between those who can turn to the ‘Bank of Mum and Dad’ and those who cannot; and the longer-term risk of accumulating debt and the inability to save,” warned the report Home Advantage

david.matthews@tesglobal.com

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