What do the world’s 3 most expensive cities have in common? This was my thought recently as I looked at pictures of Hong Kong, Sydney and Vancouver side-by-side. While there’s no denying their physical similarities, I wondered if that was where the common thread stopped?
DEMOGRAPHICS OF THE WORLD’S MOST EXPENSIVE CITIES
According toDemographia International’s Housing Affordability Survey, Vancouver clocks in as the world’s 3rd least affordable housing market. Largely regarded as the most comprehensive comparison of metro housing affordability worldwide, it covers 367 metro markets in 9 countries. They include: Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the UK and America. Covered within this framework are 87 major cities (with a population of 1 million or more), and 5 megacities.
The Demographia’s survey largely parallels the findings of the UBS Global Real Estate Bubble Index. With headquarters in Switzerland, UBS is an international financial services company that has consistently rated Vancouver as 1 of 5 metro areas “most vulnerable to risk from a real estate bubble.” The other cities include London, Hong Kong, Sydney, and San Francisco.
On the surface, these 3 cities look a lot alike. All are coastal urban centres with tall skylines and pretty waterfront housing. But that’s where some of the similarities end.
HOUSING AFFORDABILITY IN THE WORLD’S MOST EXPENSIVE CITIES
If you reference the Housing Affordability Rating Categories from Demographia, you will see that Hong Kong is drastically overpriced. Even when compared to Vancouver or Sydney. While major metro markets in Canada were “seriously unaffordable” at 4.2, Hong Kong sits at a whopping 19.0. That makes Hong Kong both “severely unaffordable” as well as by far the most expensive in the survey.
WORK WEEK IN THE WORLD’S MOST EXPENSIVE CITIES
Another large difference I found is the work life of people in Hong Kong or Sydney compared to Vancouver. According to a study carried out by the University of Hong Kong, the average number of hours an employee works in Hong Kong is about 50. Compare that to Canada where the average is 36.4, and Sydney at 38.
These numbers might not reflect reality in any of the above cities however, as reports of grueling overtime are widely known. As reported in The Province, a survey carried out by Expedia.ca showed that over 50% of B.C. residents have cancelled their vacations due to work. In addition, they are the group of Canadians most likely to forego vacation time for work. Similar reports are common in Sydney, where particular industries regularly see employees doing upwards of 60 hours a week. In the mining, construction, tourism and finance sectors it is not uncommon to hear of 70-hour work weeks. So perhaps we’re not so different after all?
POPULATION OF THE WORLD’S MOST EXPENSIVE CITIES
Another big difference is population size. Hong Kong settles at 7.3 million, while Metro Vancouver stands around 2.5, and Sydney at just under 5 million. In this arena at least, Vancouver is clearly the village. Shops, services, amenities, and the general look of the cities reflect this as well.
One of the greatest similarities between Hong Kong and Vancouver, and one which may account for the steep price tag on real estate, is the lack of land. This great article from Vancity Buzz illustrates this perfectly. Hong Kong is largely mountainous terrain, which means that only 30% of its land is developed. The remaining 70% is either unfit for development, or protected natural space. Metro Vancouver, though far less dense, is still populated by dense mountains and forests; much of which cannot be urbanized.
Interestingly, Sydney has another problem hampering its growth. Pollution. Smog often goes above national health guidelines, particularly in the south-west. Because of this, housing development has been limited by the government. Water pollution and other environmental issues due to fast population growth are also on the rise. And Sydney’s Hawkesbury river system is already under severe stress because of urban development.
IMMIGRATION IN THE WORLD’S MOST EXPENSIVE CITIES
No other Western country is seeing its cities grow as fast as Australia. It seems the reason being that more people are coming than going. An article published this year in Inside Story cites immigration from Asia as “the main driver of the nation’s growth–its economic growth as well as its population growth.” Migrants are settling primarily in Sydney and Melbourne, with 26% of the nation’s overall growth going to Sydney.
Whether looking at space and affordability, or pollution levels and quality of life, I found just as many similarities as I did differences between these cities. A solid sign that sometimes things are more than they appear.