Policies becoming irrelevant, with supply of flats outstripping demand, three reports claim Housing policy may have to be rethought by the government as changes in Hong Kong's demographics are not being adequately reflected in the supply of homes, according to three reports released yesterday. The administration has long insisted the market drives its housing and land policies. But the policies are out of step with demographic trends that weaken housing demand: slower-than-expected population growth, fewer marriages, couples marrying later in life, greater longevity and residents migrating to the mainland. Those and other conclusions were set out in three reports on the city's population dynamics and housing - by the University of Hong Kong, JPMorgan and Civic Exchange - which were released jointly yesterday. 'The demographic trends are not favourable to the housing market,' Douglas Sung He-hau, JPMorgan's head of real estate research for Asia Pacific, said at a press conference. Data also points to supply outstripping the housing needs of Hongkongers. Between 2002 and 2004, the city needed 42,875 units. That was only about three-quarters of the 55,741 private, public rental and Home Ownership Scheme flats available during the period. Although property agencies talk about rising prices and a tightening private housing supply, there is still a risk of oversupply due to the slowing rate of population growth, Mr Sung said. Christine Loh Kung-wai, CEO of Civic Exchange, cited the government's decision to dispose of its portfolio of unused Hunghom Peninsula HOS flats to private developers, who wanted to turn them into upmarket homes. 'The developers knew they couldn't sell the flats as they were,' she said. This showed the shrinking size of households may not necessarily translate into a stronger demand for smaller homes, she said. On the contrary, larger homes are going up in price, said Paul Yip Siu-fai, a senior lecturer at the University of Hong Kong's department of statistics and actuarial science. Ms Loh added: 'I am not sure we are building what we want. There is no reason to build based on quantity now. 'We should focus on quality and discuss how government policy will do that.' Eddie Hui Chi-man, associate professor of building and real estate at Polytechnic University, pointed out that a growing population of single tenants applying for public housing was not being properly considered. Professor Hui said that of the total number of public housing applications made in the 2004-2005 financial year, 41 per cent were from singles. 'This is creating a market imbalance,' Professor Hui said. Although developers could consider building more units for single users, the government should do more to capture this market. Ms Loh agreed, adding: 'There appears to be a miscommunication between demographics and government policy. They need to link up.'