The housing blues in Hong Kong

Shih Wing-Ching

Founder of Centaline Group

The most serious aspects of the housing problem in Hong Kong are inadequate supply and exorbitant prices, out of reach of most people.

One of the major causes is that not all the home buyers are genuine occupants. There are also investors and speculators. It is difficult for Hong Kong, as an international metropolis to prevent foreign people from buying properties here.

The other major cause is a mismatch of resources. The housing stock exceeds the number of households. Theoretically, every household should have a home, but Hong Kong people wants bigger flats in convenient locations. Owing to the land shortage, property prices have risen beyond people's reach.

In fact, government land planning has encountered great resistance from green groups and conservationists in the name of protection of the environment and the ridge line. But do they know some people live in sub-divided units without windows?

In my view, housing has an overriding need over other issues. To tackle the housing shortage, the plot ratio in urban areas should be relaxed for construction of more flats, while the ratio can be lower in remote areas.

After old buildings are demolished, the plot ratio of the redevelopments should be extended. This will also allow the government to gain more land premiums. At the same time, the government should look for new sites.

A long term housing strategy is necessary. It must be specific, visionary and forward-looking. It should not be too detailed, because the situation may change after a few years. The government can start work immediately.

There are about 200,000 households applying for public rental housing units. Assume there are 200 units in a housing block, 1,000 blocks are needed. This is a huge task.

I also think a two-tier structure of public and private housing is enough and there is no need to have the Home Ownership Scheme.

Housing is Chief Executive CY Leung's strong area, but he is under pressure, because the housing measures he recently announced have been criticized as having little effect.

The government has just extended the special stamp duty and introduced a buyer's stamp duty to cool the property market. I think they have only artificial effects because they only dampen people's desire to buy, without actually increasing housing supply, which is the proper thing to do.