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  • Oct 31, 2014
  • Updated: 8:52pm
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HOUSING

Private sector can help meet housing demand, say experts

Experts say firms can provide some of 447,000 units needed in next decade 'cheaper and faster'

PUBLISHED : Friday, 21 June, 2013, 12:00am
UPDATED : Friday, 21 June, 2013, 5:15am

Private developers should be invited to help the government build the 447,000 new homes needed in the next decade, housing advisers say.

Demand for half these homes will come from the grass-roots, and some believe that the private sector can provide subsidised homes more quickly and cheaply than the government.

The advisers put forward the suggestion at a meeting of the Long Term Housing Strategy Steering Committee yesterday as they were briefed on the latest housing demand forecast.

Secretary for Transport and Housing Anthony Cheung Bing-leung, who chairs the committee, said after the meeting the projection was reasonable and reflected the "real demand" because property investment was excluded.

"It's hard to get a 100 per cent correct figure because there can be lots of changes in society and the economy in 10 years. We will update our estimate regularly," Cheung said.

The forecast was based on four estimates over the coming decade. These were: a net increase in the total number of households by 290,000; the 20,000 families who need to be rehoused as a result of urban redevelopment; the 70,000 people who live in poor conditions and need better housing; and 30,000 mainlanders coming to work or study.

Cheung would not confirm media reports a day earlier, which said the government would need to build 221,800 public rental flats over the coming decade - 25 per cent more than the current construction target.

Committee member Lau Ping-cheung said half of the forecast demand would be for public housing. He suggested, and most members agreed, that officials should invite private developers to help deliver subsidised homes for sale under the Home Ownership Scheme.

"Past experience tells us that developers do a cheaper and quicker job in subsidised housing," Lau said, referring to the Private Sector Participation Scheme that was halted in 2002.

The latest forecast means there should be 44,700 new homes on the market every year.

This is not a big increase from the current annual supply target of 20,000 public housing units and 20,000 private homes.

The committee meets on Saturday to discuss the housing mix.

 

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HK-Explorer
Building 44,000 new houses a year will flood the market and will lead to a housing crash. In the past they were building 40,000 houses per year and allot were purchased by mainlanders and investors. Now all will go to Hong Kong people. Thus there will be too many houses. Any impact to the economy or interest rate raises will cause price declines. Too many houses coming on the market will create a crash. This will bring down the whole economy.
Building too fast will stretch a building sector that already has a man power shortage (which will get worse). This will cause raises to skyrocket making house building very expensive.
Also why are tax payers footing the bill to build so many houses to over subsidise public housing tenants. Public housing rents in new buildings should at least be doubled to help recoup the cost. If people don't want to pay double the rent they can live in an older building. Rents should be based on building age, location, height, view etc..
impala

Annual new household formation is estimated to be at least 30,000 per year in the coming 5 years, which is in line with the trend of about 28k in recent years. That is purely endogenous growth: the existing population getting married and starting families. If anything, this number is probably a low estimate: there is a lot of household formation demand bottled up, precisely because property prices are so high and it is very hard for starters to find affordable housing.

On top of this, we have a net immigration of some 30~40,000 people per year who need housing. Even if the new flats only go to existing residents, these people do add to the total demand for housing.
44,000 units a year is unlikely to even meet all of this demand, let alone that will crash the market.
Besides, while nobody is trying to crash the market, it is a stated policy goal to bring house prices down to more affordable levels by increasing housing supply. The current cooling measures have always been explicitly put in place as a temporary measure to dampen demand (and speculation) while the government works on the supply side policies, most of which take years to have an effect.
 
 
 
 
 

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