Date
20 August 2017
Rising housing costs is a source of worry for many in Hong Kong. Photos: wikipedia, takungpao.com
Rising housing costs is a source of worry for many in Hong Kong. Photos: wikipedia, takungpao.com

Another ticking time bomb in Hong Kong

It is one of the hot topics in Hong Kong and an issue that could fuel civil protests if not handled properly. No, I’m not talking about the Occupy Central movement, but about public housing units in the city.

First, let us take a look at the advantages of public housing. A conversation on a subway train between two former school mates, both of whom make about HK$35,000 per month each, offers a revealing picture.

One of the persons owns a residential property in Tuen Mun in New Territories while the other has taken a unit in a public housing estate in Shek Kip Mei in Kowloon on rent. 

The property owner sympathized with his former schoolmate for not having his own house, indirectly mocking him for the misfortune.

The friend didn’t argue much on the train, but later wrote an online post explaining why he thinks he is, in fact, better off than the person living in a private housing estate.

In a forum titled “why public housing is better than private?”, the public housing tenant laid out these points to his former classmate:

1. It only takes me three minutes to go to the MTR station, but it will take you at least an hour to go to work in Wanchai. Who suffers more?

2. You paid HK$18,000 for mortgage not including property rate and management fee but I pay HK$1,900 for all-in rental.

3. I have HK$16,000 more disposable income so I can afford international school for my kid and save another HK$5,000 per month for his future studies. But you paid most of your money to the ex-owner and can only afford a Tuen Mun free education along with many mainlanders.

4. I can afford an annual trip to Japan or Europe but you can only afford a Guangdong short-haul trip.

5. When we grow older, I can easily apply to move to a new apartment but you need to beg in front of the camera for reconstruction just like what we saw in those To Kwa Wan residents.

So much for the fun arguments! Right now, the choice of buying or renting a flat has become even more complicated, with prices shooting up in public housing estates. 

Local media reported this week that an apartment at the 30-year-old Lei Cheng Uk Estate was transacted at a record high HK$3 million, or over HK$7,000 per square feet, for a 494-feet unit. The same property is said to have cost just HK$235,000 when it was acquired by its previous owner in 2002.

If three million is a minimum entry ticket for the public housing estate, and given the fact there are no more than 10 new residential units that are under four million, how many years would it take for a fresh university graduate, who usually starts his first job at less than HK$15,000 per month, to save enough to be able to afford a down-payment on a house?

The answer, obviously, makes for grim news and a source of worry for the current generation. 

That is why I have repeatedly heard from friends and young people visiting Singapore that they fell in love with that city-state because the government there offers a special discount for low-income youth to help them buy their first apartment for the equivalent of around HK$2 million. Also, the Singapore apartment would be better in terms of space, with a low-end unit in that city able to compare with high-end middle class flat in Hong Kong of over 1,000 square feet.

Mapping out a good housing strategy is the only way Hong Kong’s current administration can shore up its popularity ratings, which are pretty low at the moment. Chief Secretary Carrie Lam Cheng Yuet-ngor has seen her net approval rating fall 13 percentage points to 27 due to the dissatisfaction in society over high housing costs and lack of political reforms.

She can probable take a cue from this article and speed up a plan to build a new housing estate with lessons learnt from Singapore. I have no objection if the new estate is named “Lam Cheng Uk estate”.

In the meantime, no more white papers or constitutional reports, please!

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BK/JP/RC

EJ Insight writer

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