Plan to increase Hong Kong home ownership needs tough decisions on land
Former chief executive Tung Chee-hwa has returned with a mission to make home ownership easier for the people. For those still haunted by his housing measures and the property market slump in 1998, the proposals by his think tank have raised more questions than answers. But to those who look to Leung Chun-ying for an increased supply of affordable housing, the blueprint opens a new horizon for further discussion.
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With less than two years left in his term, it remains unclear whether Leung will accept the report tabled by Our Hong Kong Foundation. His administration has just hammered out a 10-year housing strategy, part of which concurs with Tung's ideas.
The think tank has rightly challenged decision-makers and stakeholders to think outside the box. This includes introducing a rent-to-buy subsidised scheme to help public housing tenants become home owners. A HK$4 million flat can be purchased with a down payment as low as HK$100,000. To boost transactions in the secondary market, sellers of subsidised housing only have to repay a pre-determined land premium.
Some people are inevitably wary of the impact of the proposed measures, referring to the experience when Tung rolled out the annual target of building 85,000 housing units and a 70 per cent home ownership goal in 10 years. It was not so long ago that many home owners were hit by negative equity, when the value of a property falls below the outstanding balance of the mortgage. The think tank stopped short of giving any output figure this time; but aimed at an even higher ownership rate at 80 per cent in the longer run.
Home ownership in Hong Kong is currently 51 per cent, compared with 90 per cent in Singapore. It can be argued that a higher ratio can narrow the gap between the haves and the have-nots, thereby enhancing social stability. The new goal set down by Tung's foundation is admirable, albeit ambitious.
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But unless the proposals are matched with sustainable land supply, they will remain high-sounding visions and goals. That makes land reclamation and development in green belt areas worthy of serious consideration. Town planning procedures should also be reviewed to speed up the process.
Tung's story of a family forking out more than HK$3 million for a shoebox unit of 170 square feet is a reminder of the sad reality facing home buyers. There are probably worse stories to be told before the housing conundrum can be resolved. The choice is ours. Live without dignity or make sacrifices.