Hong Kong’s public housing supply will be increased to an extent that it will account for 70 percent of the total for the next decade, according to the Long Term Housing Strategy Steering Committee.
This ratio shift from 60:40 — 60 percent public flats and the remaining 40 percent private flats, which has been practiced for many years, has been mentioned in Chief Executive Carrie Lam’s Policy Address in October.
The Long Term Housing Strategy Steering Committee was set up by former chief executive Leung Chun-ying in 2012. The Committee is made up of government officials, representatives from different parties, professionals and scholars.
Responsible for setting long-term policy direction, it is a cross-department setup to ensure that policy recommendations will be implemented.
Meanwhile, there is also the Task Force on Land Supply, established by Lam in September last year. Its members include eight government officials and 22 non-government experts.
Mission of the Task Force is to research, consult and get public consensus regarding land supply, and submit policy recommendations accordingly.
Some believe that private housing prices may fall due to the planned increase in supply of public housing, while others argue that less private housing supply may underpin the prices.
Both views hold some truth, it depends on which market segment one is talking about.
For example, the starter-home market may bear the brunt of the tightening housing policy. Consisting of relatively small, or aged housing units in less favorable environment or more remote locations, potential buyers of these properties may opt to wait for public housing, either public rental flats or subsidized flats, as they offer much better value.
But for upscale market, the reverse may happen. As a global financial hub, the city has no lack of middle class and rich people and expats from overseas.
Most of them would prefer more spacious and better homes. And they would not qualify for public flats anyway.
As the government will set aside more land supply for public housing, supply of high-quality private projects would be less, thus pushing up their prices over the long run.
This article appeared in the Hong Kong Economic Journal on Dec 21
Translation by Julie Zhu
[Chinese version 中文版]
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