Hong Kong housing
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A view of residential buildings near Lion Rock in Kowloon. Photo: Sun Yeung

LettersWhat lies behind Hong Kong’s perpetual housing shortage

  • Is ‘insufficient supply’ a tagline used by the government and other stakeholders to ensure property prices stay vibrant?
The starter homes project by the Urban Renewal Authority is a step in the right direction but, at the same time, it will not solve the fundamental problem that land rights in the New Territories are being held to ransom by the villagers.

Reform is needed; however, I doubt anyone reading this will have the opportunity to witness such reform, given the mindset created by the former colonial government.

Hong Kong seems to have faced a shortage of land for over a couple of decades. The population of Hong Kong has grown by around 900,000 over the past 20 years, with a number of flats held by owners who have little incentive or intention to lease to the public market.

According to data from the Rating and Valuation Department, the overall vacancy rate of private residential units in Hong Kong was 4.3 per cent in 2020, with large units (saleable area measuring 100 sq m) having a vacancy rate of 7.4 per cent. It is important to note that the above does not include village houses.

The general vacancy rate over the past decade has stayed around 4 per cent. It is important to focus on the pool of private housing which is affordable for the average couple, and some may be surprised to learn that we have seen a slow but upward trend in vacancy rates in smaller units measuring less than 100 sq m (from 3.3 per cent in 2016 to 4.0 per cent in 2020).

While it is somewhat unethical to enforce usage of residential space, the vacancy rates convey two messages; i) “insufficient supply” is a tagline used by the government and other stakeholders to ensure property prices stay vibrant; ii) many investors are holding assets purely for capital gain.


I believe the supply of micro-flats will only worsen morale, impact physical and mental health, and generate more waste. It will also create knock-on pressure on restaurants, when people are unable to hosts friends at home, and a chain of other issues will arise.

William Yuen, Sai Kung