Opinion | Supply shortage means home is where the hardship is for Hong Kong

Our property prices are now the most expensive in the world. The average floor area of new flats keeps shrinking. Due to fears of property prices outstripping earnings, the masses have scrambled to buy flats, with the consequence of further driving up home prices.

Contrary to conventional thinking, I encourage young people to buy homes as soon as their financial situation permits, as a hedge against the future. It is a worldwide phenomenon that property prices stay high in major cities where jobs are plentiful and the market is thriving. If Hong Kong’s economy continues to grow in the context of the “Greater Bay Area”, demand for housing should continue to increase as more people invest, live and work in the city.

Admittedly, affluent children fare better. Their parents can either bequeath their home to them or finance their home buying. However not every young person has this privilege. Perhaps they can consider pooling money to invest in a flat, disposing it when the time is right to secure enough money for a down payment of their own.

The current situation favours investing in the property market. Interest rates remain relatively low worldwide. There is a lack of solid and profitable alternative investment options other than real estate in Hong Kong, and the global economic and political situation is unstable. Above all, supply of flats lags demand because of acute land shortage.

To help the underprivileged, we must take a two-pronged approach, addressing the supply and demand sides of the housing sector. Tackling one side without addressing the other is doomed to fail to restore the residential market’s sanity.