Hong Kong’s housing crisis calls for a comprehensive plan, not pocketing money from private clubs

The decision by Hong Kong’s Home Affairs Department to charge private sports clubs one-third of the market value of their land to renew their leases totally misses the point. The additional cost to these elite clubs is minimal as their steep membership fees will enable them to find the money in no time. Moreover, the government does not lack funds. Hence, the whole exercise achieves nothing. Rather, it is very disappointing as it misses an opportunity to rectify the serious lack of space facing people in Hong Kong.

Housing prices have been on the rise for the past 22 months, with a 200 square foot flat now costing more than HK$7 million. It is the shortage of space, whether private or open space, that the government must make a genuine effort to tackle.

Better-than-expected land premiums have contributed to the government’s huge surplus. Property developers can afford the high upfront payments they make to the government when buying land by passing the cost on to the people purchasing their flats. Thus, both the government and private developers make a profit at the expense of Hongkongers’ quality of life.

The unaffordable housing prices have distorted the lives of many, creating a false sense of wealth among homeowners because they will have to face the soaring prices at some point, if they need to upgrade to a larger home, for example. Home ownership has not increased in the past decade, remaining at about 50 per cent, and the average living space is still about the same, if not worse – less than 500 sq ft for an average household. At the same time, the rate of mortgage payments relative to household income is increasing, leaving families with less disposable income. Hong Kong workers who need to pay the mortgage resort to working long hours and making compromises to survive.

On a recent visit to Australia, I observed that housing prices there are also becoming unaffordable, but there are a few initiatives in certain communities to make housing cheaper for middle-income earners, such as a programme to attract investment for the construction of affordable housing, similar to our Home-Ownership Scheme. I met some recent migrants who left Hong Kong to settle in Australia simply to provide a better living environment for their children. One of the major attractions is more open areas and bigger living space. Housing prices in Australia are still relatively cheap compared with Hong Kong.