Is There Actually Affordable Housing in Hong Kong?

By Samantha Law

Housing affordability, which refers to the cost of housing services and shelter relative to a given individual’s or household’s disposable income, has become an emerging issue around the world. It is also inherently a key factor affecting economic stability, which essentially refers to the notion that people have the necessary resources to lead a healthy life.

Hong Kong is the most expensive city in the world for those looking to buy a house In 2019, the average price of a home in Hong Kong was estimated to be around $1.2 million USD, followed by Singapore and Shanghai with $874,372 USD and $872,555 USD respectively.

The difficulties in purchasing a home in the city are exacerbated by the fact that the median monthly wage in 2021 is estimated at around $18,700 HKD, according to the Census and Statistics Department Suffice to say, it is evident that Hong Kong has the most expensive housing prices (on average), but why? What is the Hong Kong government doing about this issue? In this article, I will be analysing the Hong Kong housing crisis, followed by an analysis of the public housing scheme – a government policy aiming to help those overwhelmed by such prices.

Firstly, property prices in Hong Kong have taken a toll - both mentally and physically - on some citizens’ mental health. A survey conducted by the Chinese University of Hong Kong Institute of Health Equity found that the heavier the burden of housing prices, the worse the physical and mental health of its citizens. The survey questioned 1,978 adults, and calculated the housing affordability based on the respondent’s income after deducting housing costs.

The research team found that respondents with poorer ability to afford housing – which was measured by asking respondents to self-report information on monthly household income and mortgage payments – were more likely to be older, un-married, less educated, less physically active, smokers, and renters of public housing. Additionally, they tended to have worse mental and physical health. Moreover, almost 37.7% of respondents in the poorest housing affordability quartile were deprived. This is crucial evidence showing the importance of improving housing affordability to ensure economic stability – by improving housing affordability, we can simultaneously improve the mental and physical well-being for the Hong Kong people. Secondly, the public housing policy aims to provide sufficient public rental flats to those who cannot afford any other type of housing as well as those in genuine need. Since its establishment in 1973, 26.1% of the population in 2016 were reported to be living in public rental housing. However, there are still many more who live in inadequate housing: approximately 122,000 in 2021, which was a 4.1% increase compared to 2020.

Among the inadequately housed, 73% – approximately 92,200 –are living in subdivided units. Suffice to say, regardless of the public housing policy, many more still have to trudge through their days living in inadequate housing. Therefore, it is crucial that we find ways to provide affordable housing to ensure economic stability, regardless of wealth.

One such program, the public housing scheme, has certainly helped tenants save disposable income. In a seminar held by the Hong Kong Jockey Club Centre for Suicide Research and Prevention in the Univeristy of Hong Kong, Dr Yi Zhang presented a positive relationship between public rental housing and household savings. Between the years 2009 and 2010, tenants in public rental housing saved (on average) $70,000 HKD, while private households saved $40,000 HKD.

On the other hand, many families have to wait excruciatingly long in order to successfully rent or buy a home in Hong Kong: the average waiting time for subsidised public housing has climbed by 5.8 years, meaning it would take an ordinary family nearly 21 years to buy a home in Hong Kong There are many reasons in play: scarce land and a supply bottleneck.

According to 2019 data, Hong Kong covers a total of 111,100 hectares (approx. 429 square miles) of land. Of that, the area used for construction and development accounts for 25%, country parks account for 42%, while the area of land used for building houses accounts for only 7%, which has remained stagnant throughout the past 15 years. Hong Kong does have land, but it isn’t much; and 70% of Hong Kong’s land has not yet been developed Therefore, a social consensus is required in order to utilise said 70% of the land – application for redevelopment takes at least six years, while subsequent construction work takes another four to five years, while simultaneously battered by opposition from the public, ultimately forcing a lengthy judicial review.

Moreover, the land redevelopment program has recently been decelerating (as of 2021), partly due to complicated administrative approval procedures According to one government official, the redevelopment program to provide housing supply “in the short term to medium term will be difficult” as it may require many discrepancies among other stakeholders (such as neighbouring residents, construction workers, etc.) However, many believe that only the development of new land, through new development areas and land reclamation, can be a permanent solution

Fortunately, there are solutions to this housing disparity. In the past few years, the Hong Kong government has outlined many solutions to try to tackle the housing and land shortage In the 2021 policy address, it laid out the plan to use 350 hectares of land to produce around 330,000 public housing units in the upcoming 10 year period In addition to this, the Our Hong Kong Foundation (OHKF) has published some suggestions for actions that the government could consider to alleviate delays in housing supply and breakthrough points, including reducing unnecessary vetting and approval procedures (by simplifying procedures, removing barriers and facilitating collaborations between the public and private sectors as well as increasing efficiency within civil servant departments), establishing simple and crossdepartmental targets as well as performance indicators for civil servants, and increasing engagement and trust between government and society by recognizing the necessity to prioritise housing demands and achieving a society-wide consensus.

I believe that a consensus and a collaboration between administrative and societal communities should be strengthened and further improved. Throughout the tumultuous ups and downs Hong Kong has faced, a bond is required in order to go beyond the status quo and achieve our goals as a society I hope that you, as a reader, would understand the disparities that exist in our society today – even beyond just the housing crisis. By recognizing and acknowledging the prevalence of these problems and issues, we can take our first step towards solving them.