Economic Development and Housing Markets in Hong Kong and Singapore
Figure 5: Housing Price Controls in Hong Kong 90,000 80,000 70,000
HK$/sq.m
60,000 50,000 40,000 30,000 20,000
Private housing price
10,000
subsidised housing prices
0 1995
1996
1997
1998
1999
2000
Year Source: Housing Department
The Impact on the Tenure Structure
Government intervention has a great impact on tenure structure. For a long period, housing policies concentrated on providing low cost rental housing for relocation of squatters and for housing low income households. However, since 1978, the ideology of housing policy has shifted from providing basic standards of housing for poor people and housing hardship households to promoting home ownership. In countries like UK, the promotion of home ownership reflected the ideology of the conservative party. It was part of the strategy to privatize the public housing sector. It was much about the sale of the existing public housing stock to sitting tenants and therefore to reduce the role of the government in the housing sector. However, in Hong Kong, the promotion of home ownership was to start fresh programmes to build flats for sale by the government. Therefore the role of the government was not reduced but expanded. It introduced a Home Ownership Scheme in 1976 and a Private Sector Participation Scheme in 1978. 30
After the handover in 1997, the sentiment for a home ownership society has even become stronger. The government has explicitly expressed its tenure-preferential policy. It strongly favours home ownership over rental housing. Chief Excutive Tung in his first policy address created a vision of home ownership city and aspired to achieve a home ownership rate of 70 percent. “The government is fully determined to achieve this target�. It actively promoted home ownership through a range of measures. In the 1998 budget, the government provided HK$ 3.6 billion to double the number of first-time buyers through the home starter loans scheme and provided HK$ 3.3 billion to increase the number benefiting from home purchase scheme by 2.2 times (Lam, 2001). The home ownership rate has steadily increased in the last two decades. It increased from 35 percent in 1983/84 to 55 percent in 2000/01. The home ownership distribution can more clearly indicate the intensification of government intervention in promoting home ownership. In 1983/84, only 3 percent of