17th June 2024 – (Hong Kong) Hong Kong’s gleaming facade conceals a myriad of economic woes that have left its residents grappling with a profound sense of unhappiness. As the city retains its dubious distinction as both the world’s most expensive city for expatriates and the most unaffordable housing market for the 14th consecutive year, the plight of Hong Kongers has become increasingly dire, with many seeking solace and respite in the neighbouring city of Shenzhen.

The 2024 Mercer Cost of Living Survey, which evaluates the comparative cost of over 200 items across 226 cities, has once again placed Hong Kong at the top of the list, highlighting the exorbitant costs that expatriates and locals alike must contend with. The survey points to housing costs as a primary driver of these rankings, with Hong Kong’s astronomical property prices forcing residents to spend an average of 16.7 years’ worth of their entire income to afford a home. This staggering figure, while a slight improvement from the previous year’s 18.8 years, underscores the deeply entrenched housing crisis that has plagued the city for over a decade.

The seriousness of Hong Kong’s housing affordability issue is further highlighted by the Demographia International Housing Affordability report, which has ranked the city as the world’s most unaffordable property market for the 14th consecutive year. The report utilises the median multiple, a price-to-income ratio that divides the median home price by the median annual household income, to assess affordability. Hong Kong’s median multiple stands at an astronomical 16.7, indicating that the average family would need to save their entire income for nearly 17 years to afford the average home. This alarming statistic not only highlights the severity of the housing crisis but also the profound impact it has on the lives and well-being of Hong Kong’s residents.

Compounding the housing crisis is the sharp wealth disparity that has become increasingly pronounced in Hong Kong. While the city boasts one of the highest per capita incomes in the world, the benefits of this prosperity have not been evenly distributed. The income gap between the rich and the poor has widened significantly over the past two decades, with the richest 10% of Hong Kongers now earning 47 times more than the poorest 10%. This growing inequality has left many residents struggling to make ends meet, with the minimum wage frozen at a meagre HK$37.5 per hour, or roughly HK$6,000 per month, far below the average monthly expenses of HK$6,000 to HK$8,000 (excluding rent) for a single person in the city.

The combination of sky-high living costs and stagnant wages has left many Hong Kongers feeling trapped and disillusioned, with little hope of ever achieving the “Hong Kong dream” of owning a home and securing a stable future. The stress and anxiety associated with this financial strain have taken a heavy toll on the mental health of the city’s residents, with studies indicating that over 10% of Hong Kongers experience severe levels of stress, and more than 20% suffer from extreme depression.

In a desperate attempt to escape the suffocating costs and pressures of life in Hong Kong, many residents have turned to the neighbouring city of Shenzhen for respite. The ease of travel between the two cities, coupled with the favourable exchange rate between the Hong Kong dollar and the Chinese yuan, has made Shenzhen an increasingly attractive destination for Hong Kongers seeking cheaper goods, services, and entertainment. In 2023, Hong Kong residents made a staggering 53 million trips across the border to Shenzhen, equivalent to seven trips per resident, with many citing the city’s lower prices, superior range of shopping and dining options, and convenient transportation as major draws.

The exodus of consumer spending from Hong Kong to Shenzhen has dealt a severe blow to the city’s already struggling retail and hospitality sectors. Many local businesses, unable to compete with the lower prices and superior offerings across the border, have been forced to shutter their doors, leaving once-vibrant shopping districts and high streets dotted with vacant storefronts and “for rent” signs. This hollowing out of Hong Kong’s retail landscape has not only exacerbated the city’s economic woes but also contributed to a growing sense of malaise and disillusionment among its residents.

The Hong Kong government has attempted to address the housing crisis through ambitious initiatives such as the Lantau Tomorrow Vision project, which aims to create 1,700 hectares of artificial land to supply up to 400,000 homes, and the Northern Metropolis plan, which is expected to generate more than 900,000 new housing units over the next two decades. However, these projects have been met with scepticism and criticism, with many residents questioning their feasibility, environmental impact, and ability to truly alleviate the city’s deep-seated housing affordability issues.

Moreover, the government’s efforts to stimulate the local economy and boost consumer spending have largely fallen flat, with initiatives such as the “Chubby Hearts” event, intended to facilitate tourist snapshots, being dismissed as lacklustre and ineffective. The city’s attempts to attract international star power, such as the much-hyped appearance of football superstar Lionel Messi in a friendly match, have also backfired, with the controversy surrounding Messi’s no-show further damaging Hong Kong’s reputation and fueling anger among disappointed fans.

As Hong Kong grapples with the multitude of economic challenges that have left its residents feeling increasingly unhappy and disillusioned, it is clear that bold and innovative solutions are needed to address the city’s deep-seated issues. The government must prioritise policies that not only alleviate the housing crisis but also promote a more equitable distribution of wealth, foster the growth of local businesses, and create meaningful opportunities for its residents to thrive.

Simultaneously, Hong Kong must work to rebuild its reputation as a vibrant, dynamic, and attractive destination for tourists, businesses, and talent from around the world. This will require a concerted effort to showcase the city’s unique cultural heritage, culinary delights, and natural beauty, while also addressing the underlying social and political tensions that have contributed to the current climate of discontent.

Ultimately, the path to greater happiness and prosperity for Hong Kongers lies in a comprehensive, multi-faceted approach that tackles the city’s economic woes head-on, while also fostering a greater sense of community, belonging, and opportunity for all. Only by working together to build a more inclusive, equitable, and resilient Hong Kong can the city hope to overcome the challenges it faces and restore the sense of optimism and vitality that has long been its hallmark.