Chief Executive CY Leung’s proposal to lower housing prices wouldn’t improve affordability, experts say

Chief Executive Leung Chun-ying’s proposal to lower apartment prices by pegging them to construction costs has been criticised by housing experts who said it fails to solve the crux of the city’s land shortage issue.

Head the University of Hong Kong’s real estate and construction department Professor Chau Kwong-wing, said the plan was not feasible for government subsidised flats.
“The discount is not the key issue here. If the size of the cake is small, it doesn’t matter how you cut it, prices would still not be affordable for those who aren’t eligible for subsidised housing,” Chau said.
“You can reduce the price, but with so few units available, it doesn’t make a difference.”
Chau said if more land resources were allocated to subsidised flats being sold at construction costs, it would make private sector apartments more unaffordable.

“This would mean less supply of private flats and those who aren’t eligible for government subsidised flats will suffer even higher prices,” Chau warned.

Last year, the government admitted it would fall short of its 10-year public housing production target of 280,000 units by 25,000.