According to the Composite Consumer Price Index, there has been a very significant increase in the expenses of housing in recent years.44 Households with the slowest income growth (e.g. tier one Working Population Income) 45 has to cut down other expenses in order to balance out the rising cost of housing, which may affect their quality of living.
The slow increase in housing supply causes the housing supply to fall far behind from the already-steadily increasing housing demand. Among the private housing properties, Type C’s (i.e. the relatively larger sized housing units) supply has the largest increase, but the general public finds them hardly affordable.
The change of Hong Kong’s demography may also change the demand for housing.
An increase in average income has also strengthened the public’s willingness to pay for housing, which in turn stimulates the demand for the real estate market.
In recent years, the demand for sub-divided flats from grassroots families has been increasing. There are at least two key reasons behind this phenomenon: First, it shows that the real income growth may not be able to catch up with the growth of housing price. Second, it slows that public housing and those relatively cheaper flats are in shortage. Lower income groups have no choice but to live in the more affordable, yet ill-conditioned sub-divided flats.
History of Housing Market in Hong Kong
The landscape of housing in Hong Kong has experienced phases of changes. The following table introduces the history of the Hong Kong housing market and relevant housing policies briefly.
Freezing out the numbers of squatters through a HK Government conducted registry scheme, squatters are only allowed before the land it built on is required for public purposes. 46
Source: Hong Kong Housing Authority, City University of Hong Kong: Hong Kong Housing Homepage, Consultation Document on Long Term Housing Strategy
After the Handover
Year
Historical Events
Policies/ Policies aims
1990s- 2000s
(1997)
Limited supply of land and housing units could not catch up with the growing demand due to various demographic factors, especially migration. 47
Expectation of housing is also rising with growing prosperity.
From the financial year of 1999 to 2000, HKSAR Government set target of 85,000 flats per year (50,000 public flats and 35,000 private flats).48
Some of Mr Suen Ming Yeung’s polices during that time (孫九招) :
Regular land auctions and the Application List System were stopped and suspended until the end of 2003. New supply of land would be applied by real estate developers from the Application List.
Suspension of sale of HOS and PSPS .49
Source: Hong Kong Housing Authority, City University of Hong Kong: Hong Kong Housing Homepage, Consultation Document on Long Term Housing Strategy
