Hong Kong’s housing target is meaningless if it doesn’t help those who can’t afford a place to live
The reduced housing output target does not instil public confidence in the government’s determination to adjust prices through adequate supply
Two news reports sat oddly together over the past week. In a turnaround from its previous housing supply target, the government has lowered the 10-year new build figure from 480,000 to 460,000 units. Separately, subdivided living space for low income earners is said to become more expensive. A rent index compiled by a university research unit has surged by 56 per cent since 2012, outstripping the rise in prices for the city’s most expensive flats during the period.
The two stories are unrelated. But they speak volumes of our housing conundrum. The government believes runaway property prices can be tamed by boosting supply. This can be achieved by matching the housing needs with sufficient new building in the next decade. While a clear target enhances transparency and removes uncertainties, it becomes meaningless if it does not translate into more affordable prices for home buyers and tenants.
Officially, the number of subdivided flats has risen by 2,100 to 87,600 over the past year. Despite the shoe-box size, the per-square-foot price of such units may be even higher than many luxury apartments. Typically, a partition no bigger than the size of a bed may already cost a few thousand dollars a month. Recently, the limit has been stretched further, with a single flat carved up into upper and lower levels of capsule-like living spaces.
The recent downturn in property prices at some residential sites may provide some relief to tenants and buyers. But whether it has trickled down to the subdivided flat market remains to be seen. Many low income earners are forced to stay in such appalling conditions pending the allocation of public housing. As the queue for public housing lengthens, the demand for such interim housing options also surges. Although many subdivided flats were illegally converted and have become serious safety hazards, the high demand makes a total ban unrealistic.
That the housing target has to be revised in just a year is lamentable. The previous one took a great effort to be hammered out. The amendment may be necessary from a statistics point of view, as the city’s population projection has recently been revised by the government. A reduction of 20,000 units during a span of 10 years may not be much. But as housing minister Anthony Cheung Bing-leung conceded, it would add to the uncertainty in supply beyond 2020. The reduced target does not instil public confidence in the government’s determination to adjust prices through adequate supply.