Date
15 December 2017
High property prices have bred resentment among Hong Kong youth and are prompting more people to seek public housing. Photo: HKEJ
High property prices have bred resentment among Hong Kong youth and are prompting more people to seek public housing. Photo: HKEJ

Public housing shortcut: Is there no way out for the youth?

Leung Chun-ying will deliver his 2015 Policy Address tomorrow. According to reports, Hong Kong’s leader could unveil, among other things, some measures to boost the prospects of the youth.

The initiatives are seen crucial as the younger generation has been complaining bitterly about unaffordable property prices and lack of opportunities to climb the social ladder.

The housing woes have become such a large problem that some youth are applying for public housing right after they graduate from university.

Hong Kong’s public housing is intended to cater to low-income families, but some people have now begun to abuse the system.

In order to qualify, some fresh grads would rather seek a lower salary job, work only part-time or even stay unemployed just to meet the income cap for public housing.

In an interview with Cable TV News, Chan Chung-bun, chairman of the Commission on Youth, said it breaks his heart whenever he learns about such cases.

Rather than resort to short cuts, young people should work hard and save for at least five to six years to generate down-payment money to buy their own houses, he said.

“This is the spirit that young people should have,” Chan said. “There is no reason to give oneself up at such a young age.”

The advice may be timely, but it is not something that the youth are buying. Some netizens even mocked Chan for not understanding the younger generation.

As a matter of fact, a small-sized flat in Hong Kong has seen its price climb to over HK$3 million (US$386,000) on average. If one were to take a 70-percent mortgage loan, a buyer still has to come up with around HK$1 million as initial payment.

If a fresh graduate wants to buy a house after working for six years, it means that he or she needs to save around HK$14,000 per month, which is quite impossible for them. It would certainly be harder if they are the bread winners of the family.

Their frustration is understandable, given the fact that can’t afford to buy a house and build their families no matter how hard they work.

But equally important is for them to invest in themselves while they are still young, and focus more on developing their careers. Sacrificing career in order to secure public housing may not be the smartest approach.

Hong Kong property, like every other asset class, has its cycles. Home prices can go up sharply, but they can also plunge without warning. If property appears to be unreasonably high and unaffordable, perhaps it is just not the right time to make a purchase.

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RC

EJ Insight writer

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