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  • Dec 20, 2014
  • Updated: 12:46pm
NewsHong Kong

More than 170,000 living in subdivided flats in Hong Kong

Study commissioned by government to give first indication of scale of problem doubles previous estimate - and actual total may be even higher

PUBLISHED : Tuesday, 28 May, 2013, 12:00am
UPDATED : Tuesday, 28 May, 2013, 8:45am

More than 171,000 people are living in substandard, subdivided flats in Hong Kong, it was claimed yesterday.

The estimate is more than double the total of 64,900 given by the Census and Statistics Department last October.

And the figure is thought to be even higher as researchers could not examine illegal homes in industrial buildings, said the secretary for transport and housing, Professor Anthony Cheung Bing-leung.

See more photographs of Hong Kong's cramped subdivided flats 

The study was commissioned by the government to give a first indication of the scale of the problem.

Cheung said after a meeting of the Long Term Housing Strategy Steering Committee yesterday: "I can't say whether it's a large or small number, or whether there's an increase, because this is the first time we've done it. But as we draw up the housing strategy, we'll take the data into account."

The committee will make its recommendations by August.

The study results coincided with another government release, which said home prices are the least affordable since 1999.

The mortgage-to-income ratio of a 45 square metre home, for a family earning the median income, surged from 52 per cent in the preceding quarter to 56 per cent in the first quarter this year.

And in a further indication of the city's housing woes, it was revealed the number of applicants on the waiting list for public rental accommodation climbed to a 20-year high of 228,400 by the end of March.

The administration has identified the problem of subdivided flats as a priority. Low-income families and new immigrants often choose to dwell in such units, conveniently located in old buildings in the urban centre. But poor workmanship means they create fire risks and a danger of leaks and structural overload.

The estimate of 171,300 is 2.6 times the figure given by the Census and Statistics Department. The study was carried out by Policy 21, a company set up by academics from the University of Hong Kong.

Researchers visited 10 per cent of the city's 18,600 blocks older than 25 years. Blocks of residential or mixed uses were sampled from each of the 18 districts.

They found flats were divided into 3.6 sub-units on average and projected there were 66,900 subdivided homes. Of these, 30,600 lacked their own kitchen, bathroom or water supply.

Committee member Dr Andy Kwan Cheuk-chiu said the government should focus on the 30,600 units in the worst condition. He said: "They should see if people living there are in need of social welfare and relocation, and whether the buildings have a safety problem."

Sze Lai-shan, of the Society for Community Organisation, said the government should reinstate rent control - which Cheung has repeatedly ruled out - and give a rent subsidy to such residents.



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Looks there is no social progress. Divided flats were the norm in the 50s and 60s when mainland refugees flooded Hong Kong. It is talking nonsense when putting divided flat dwellers in the same breadth with unaffordable housing. It makes more sense if we talk about rent control. No and stop government rent subsidies. It is a clever way to create wealth by transferring money from the general public into the pocket of greedy landlords. Would it be a kind of silent collusion between government and gouging landlords – though no discuss but the end effect is just the same.
Conduct a survey on who exactly owns these flats and also investigate how much tax the landlords have paid in the past few years on rental income received. If their owners claim records don't exist, IRD should use their powers to make a deemed assessment and then charge the back-taxes.
Most of these flats have a rateable value based upon the whole unit being a single residence. The sub-dividing of flats, however, can double or even treble rents collected per sq. ft. It should be pay-back time for the greedy landlords who own these flats.
Let more rich mainlanders **** HK property.. For the love of God stop this craze by mainlanders
IRDHK, your numbers are off. And you (therefore) overestimate the effect of public housing on affordability.

(1) 31% of the HK population lives in public housing, not 60%.

(2) That is a lot, but really not a huge outlier compared to other urban areas where public housing has -historically- been a significant tool to manage population housing needs, like London (about 25%) or Paris (24%). These cities nevertheless have much better affordability ratios.

(3) You can't deny that house prices have risen much faster than incomes in HK. Take a graph expressing the average price per sqft of a private sector property as a % of monthly median income. At the moment, this is 28% (median monthly income: 21k and avg sqqft price: 6000). With data for the past 20 years, the only other time that ratio was this high was in the 1997 property bubble. Most of the the time, it hovers between 15~20%, with a low of 13% in 2002.

This %, by the way, is close to the average of about 1/3 of income that households tend to spend on housing: an average HK household can buy 1 sqft of an average property with 1/3 of their income every month. For a 600 sq ft flat, that means 600 months, or 50 years.

By the way, you can actually add the public housing benefit to household income. The 2011 census has all the data for this. Yet, with an avg housing benefit of HKD 420 per household, this certainly won't improve the affordability ratios so much you can claim there is no problem at all.
Taking a rentable flat out of the rental market because it brings in less profit sure can happen but for the practical minded Hong Kongers they will not do. When government insists on rent control, landlords will just live with less profit. The expanses for upkeep and cost shouldn’t be a part of objection because no one including the government would set up a rent control results in landlords’ living in destitute.
What an immaterial, childish and empty-headed non-argument agains rent control.
IRDHK you are taliking rubbish. Look at what half a million pounds sterling buys you in the UK (nice house with garden) or in France (a chateau) or in Macao (quite big apartment, just) and then Hong Kong, and say housing costs are similar. Absolute rubbish.
The words you seem to be searching for include "affordable" and "median". Unfortunately they don't add much to your wrong-headed argument. Affordability isn't about what somebody in some other country pays. In HK it is about how much a HK belonger/resident has to pay for housing, and that is about 20 times median annual salary for a 603 sqft flat in Telford Garden. If you don't think that's a problem then I congratulate you on your good fortune and lament that it prevents you from seeing how others might not want to spend 20 years of their life working to pay MTR Corp for a concrete box.
boondelyan, agreed. Although... in your example,you are optimistically assuming that a household will spend 100% of its income on housing, and that mortgage rates will stay as low as they are. In reality, households are more likely to spend between 1/3 and 1/2 of their income on housing, bringing the number of years to 40 or even 50, not even taking into account interest costs. So yes, it is ridiculous.
If I was a landlord of subsidized flats that were old based on this report I would raise the rents now. So many people will start looking at getting a subsidized flat in very old buildings as it will increase their likelihood of getting a government flat earlier as they are now the priority for the government.
Also once those 30,000 move out another 30,000 will be waiting to jump into those places so they get a flat.
the whole housing adorability issue in Hong Kong is all make believe. They take the medium income of all the people in Hong Kong and assess their ability to afford a private flat and find it very low compared to other countries.
Of course they will find it low. Other countries don't have 60% of its residents living in subsidized housing where they pay ridiculously low rents.
The government should remove the bottom 60% from it's statistics and then look at affordability and you will find houses are very affordable. Some people would say this is un-fare but actually it is fare as it compares people in the private market across countries.
Housing in HK is pretty much the same cost as UK, US, Canada, Aus etc.. Yes, houses are smaller so per square foot is pricy but house to house roughly the same.
Rent control? This means people with second homes just wont rent them out. If right now I could rent out a house for $20,000 a month and all of a sudden the government said I just can charge $10,000 a month I would get out of the business of renting out the house.
Landlords need to pay management fees, agent fees, loose money when not rented and also must pay tax on the money that comes in.
If you can't get a good return then may as well just put money in funds.
There is actually nothing wrong with the housing situation in Hong Kong
This is real, something we need to face.
It's almost as if the government has a very strong desire to maintain a waiting list for public housing...
If the government wasn't in the pocket of the 5 major developers, the demand for space would not be as great and normal landlords wouldn't have the opportunity to sub-divid flats.....
This storyline is just like the attempt to study expensive countries like Norway.
Even though they have to justify the cost and planning but :
They spent an undisclosed amount of money to access how many people have to live in sudivided flats. And then what? will it increase the pace to build public housing?
They better save this money to raise more of it right now. I don't think that in the current situation we will have more public housing than applicants.
jve: It is my understanding that spending anything over 15 to 20% of income for shelter is quite excessive, much less the 40 to 50% levels that are prevalent in HK.
With respect to the average price per SF versus median income measure you are quoting above, 28% is exceptionally high considering this is more than double that of the 13% in 2002. Given that my own analysis shows that property prices around 2002 to 2004 were consistent with healthy long term appreciation, then the long term goal for this measure of shelter affordability would be 13% give or take. So average price per SF would have to drop about 55% for housing to become affordable.
If unit square area price is more for a house of same in area, the house of a lesser unit cost will cost less, absolutely. That is what house to house will yield. No??? I don't think I am pulling your leg? Neither I like you to do it to me.


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