26 March 2019
Pedestrians walk near a public residential estate in Shatin. More and more young people are applying for public rental flats. Photo: Bloomberg
Pedestrians walk near a public residential estate in Shatin. More and more young people are applying for public rental flats. Photo: Bloomberg

How young graduates cheat their way to home ownership

When a young university graduate boasted on social media how he got a public rental flat by pretending to be poor, he highlighted loopholes in a system that has been exploited for years with the government unable to do anything about them.

The crux of the problem lies in a “means test” that is neither a test nor a way to gauge an applicant’s ability to pay rent.

The theory is that if an applicant makes less than HK$9,670 a month, he or she can’t afford to rent a private apartment, so a public rental flat is the answer and the government can make such flats available.

That’s the theory. The reality is different because cheats can easily game the system.

The young university graduate did it methodically, following his own rules:  

1) Never sign a permanent employment contract. Do several part-time jobs at the same time.

2) Insist on getting your salary in cash. Your bank account should not show a significant balance.

3) Apply for a public rental flat as soon as you’re old enough.

4) Never be a co-owner of your parents’ assets.

In fact, the 25-year-old is from a relatively well-off family, he told the Hong Kong Economic Journal Monthly.

He works for the family business which runs six retail outlets across Hong Kong.

Within three years of graduation from a local university, he secured a public rental flat after being included in the Housing Authority’s express allocation scheme.

Interestingly, there were 255,800 applicants in the queue, a record at the time that he received his allocation — a 300-square foot flat on Hong Kong Island — in June last year. 

Others have had a similarly easy time. 

They say the best time to apply is just after you turn 18 when you still have no income to declare and the best way to do it is with an elderly family member who gets priority in the government’s points quota system.

If you happen to be employed, you can quit your job in time for the means test by checking an online service that lets you track the progress of your application.

But why go through all the trouble?

The ultimate aim, apparently, is not to get a public rental flat and pay lower rent but to get ahead of other applicants for private flats under the Home Ownership Scheme (HOS).

As public rental housing tenants, they get first crack at HOS flats which are a real bargain.

For instance, an 800 square foot, three-bedroom unit in Tin Shing Court, a large estate above the Tin Shui Wai MTR station and light rail interchange, goes for just at HK$2 million. By comparison, a similar flat in YOHO Town in Yuen Long costs HK$6 million.

It’s little surprise many younger prospective buyers are taking this route to home ownership at the expense of people with genuine housing needs.

Government figures show there are 70,000 applicants on the waiting list for public rental housing aged between 18 and 29, about 45,000 of whom have post-secondary or tertiary education. 

Stanley Wong, chairman of the Housing Authority’s subsidized housing committee, admits there are cases in which applicants cheat the means test “but the committee cannot do anything about it”.

– Contact the writer at [email protected]


A shoe-box public housing flat could lead to a bigger apartment for a bargain under the Home Ownership Scheme. Photo: Bloomberg

EJ Insight writer

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