The Planning Department survey of housing aspirations gives a good indication of household opinion on the matter of housing - with people clearly growing more intolerant of small flats and high prices. Importantly, for the first time, the survey also indicates the public does not think much of the Government's push to increase home ownership through construction of Home Ownership Scheme (HOS) flats, rather than increasing land supply for housing. Evidence of the public's disfavour of HOS, its uncertainty of the Government's commitment to the housing policy, along with the threat of falling government income as property prices continue to fall, means the wisdom of the entire housing programme has been thrown in doubt. Based on the results of the survey, 89 per cent of new households - the population is growing at a rate of 1.6 per cent per year - will need separate housing each year. But it also indicates that less than 20 per cent of households considered HOS a reasonable alternative to private housing. Meanwhile, a third of all households said they would like to live in public rental housing. Not surprisingly, between half and 66 per cent of all people preferred private housing. Yet, of the 85,000 annual new flat target, Director of Housing Tony Miller said that HOS would provide 35,000 units per year, with the private sector hopefully kicking in another 35,000 units. The Government hopes this flat production rate will enable 70 per cent of households to own their own homes within 10 years. However, there is growing consensus that those targets are unattainable. Investment bank SocGen-Crosby's research department estimates private flat production will fall below 15,000 units in 2000, less than half of what the Government expects. The reason it gives is simple - the Government cannot force developers to build flats if it is uneconomical for them to do so. Hong Kong Institute of Real Estate Administration vice-president John Hui Wing-to said: 'People seem to forget that home-ownership demand is based on economic circumstances.' But since the supply of rental versus for-sale housing is fixed each year, mismatch of demand and supply could still mean wild swings in property prices. Rather, property experts say the housing policy's mission should be to ensure adequate, basic shelter for everyone, and only then to look at satisfying households' demands. In any case, some property experts fear the housing policy has degenerated into a numbers game. Brooke Hillier Parker senior partner Nicholas Brooke says the Government looks to be in danger of offering the market the wrong product. 'Housing policy flies in the face of this survey,' he said. Oddly, or presciently as some analysts believe, despite the importance of HOS to its housing programme, the Government has never committed to any concrete HOS supply figures, sticking only with the vague 50,000 public-sector supply promise. Morgan Stanley managing director Peter Churchouse says he disagrees with government intervention in home ownership. 'It is ridiculous the Government's housing policy should work towards subsidies rather than making more housing available simply through increasing supply and, hence, affordability,' he said. Analysts argue that the Government's reliance on land and property income to fund its budget means that true housing reform is impossible. In the present government Budget, the provision of housing will make up 16.8 per cent of total expenditures, ranking second only behind education. Most of the spending will focus on building HOS flats. By contrast, more than two-thirds of government revenue is, directly or indirectly, property-related. In a positive market environment, the inefficiencies of housing policy are hidden behind rose-tinted glasses. With the prices of flats increasing, homeowners can bank their capital gains against bigger and better flats, ensuring upward housing mobility. But just as the Government cannot force the private sector to produce flats, it cannot force the public to buy flats when they cannot afford to do so. 'Property purchases stem, in part, from investment expectations - for housing decisions, renting is just as good,' Mr Hui said. When housing policy so grossly misses household demands, analysts question how much of the property crisis is due to the housing policy itself.