Do not blame only mainlanders for creating the biggest housing bubble in Hong Kong in 20 years.
It’s time to look more closely at the problems within our own society and how we locals may have actually made the housing situation worse.
Among the various factors feeding the demand for new homes, adding fuel to the already crazy property market, is a rising divorce rate among Hong Kong people.
That is according to Richard Wong Yue-chim, a well-regarded economist who is also a real-state expert as he sits on the boards of three listed property companies.
As more couples opt to end their marriages and go separate ways, there is a rush for alternative accommodation, which is contributing to the surge in property prices, Wong suggests.
To put it bluntly, there are just too many divorces in this city.
Well, let’s look at the data. From 1996 to 2015, a total of 878,552 people entered into matrimony in the city, while 323,298 people got divorced. Among divorcees, 256,066 got remarried.
With more divorces than remarriages, one can guess that tens of thousands of new singles would have had housing needs.
As demand was rising, government statistics show that new-home supply in the city actually fell to 857,378 units in this period, compared with 1,267,335 units between 1976 and 1995.
Wong, who teaches economics at the University of Hong Kong, noted that the divorce trend was not something that policymakers in Hong Kong could have predicted.
While authorities were caught unprepared, real-estate developers sought to cash in on the incremental demand from newly divorced or separated people.
Given Wong’s insights on social trends and their impact on the property market, it’s no surprise that three developers — Sun Hung Kai Properties, Great Eagle Holdings and Pacific Century Premium Developments — hired the professor as an independent non-executive director on their boards.
An imbalance between demand and supply has pushed home prices higher, forcing many less well-off divorcees to settle for subdivided flats.
Divorce is a social problem not just in Hong Kong, but in many parts of the world as well. Thanks to the rise in women power and the females’ quest for a better life (if they fell for the wrong man), they would opt for divorce more easily now, compared to an earlier era.
In the period from 1976 to 1995, one in 10 couples ended up in divorce.
The integration between Hong Kong and China has opened up more marriage opportunities for Hong Kong residents.
Previously the social scene was predominantly one of old husbands and young wives, but now we have a situation where more Hong Kong ladies are marrying younger partners from China.
Meanwhile, there is a caveat with regard to all this debate about increased divorces.
The statistics may be inflated a bit because quite a few mainland ladies came to Hong Kong through fake marriages.
Still, it does not change the overall fact about more newly-single people needing places to stay.
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