Letters | Improve Hong Kong home ownership rates the right way, not through subsidies

Name: Hong Kong has until 2049 to fix its housing crisis, but is it possible?
Uploaded: 2022-07-04T06:30:20.000Z
Duration: 10 min 8 s
Description: Hong Kong has until 2049 to fix its housing crisis, but is it possible?

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Blocks of flats in Wong Tai Sin. Photo: Felix Wong

Letters

Published: 2:30pm, 4 Jul 2022

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Hong Kong’s high housing prices have been a constant topic of discussion for more than half a century. One gets the impression that if the problem had a painless solution, it would have been solved long ago.

Hong Kong covers a small area but is wealthy, and most of that wealth is tied in property. If home ownership is going to become affordable to around 80 per cent of the population, then much of Hong Kong’s wealth would need to evaporate.

That evaporation would put many homeowners into negative equity and banks would need to recall business loans with property as collateral. Hong Kong would be put into an economic tailspin.

Tung Chee-hwa tried to reduce the cost of housing with an ambitious building programme, but with many owners put into negative equity, he eventually resigned. His successor Donald Tsang Yam-kuen had to urgently reverse the situation by almost closing the land supply tap and offering Hong Kong identity cards to mainlanders investing in property.

10:08

Hong Kong has until 2049 to fix its housing crisis, but is it possible?

I would urge the government to build as many public rental homes as quickly as possible and leave the rest to private developers. This way, the important income from land sales will continue to flow.