Hong Kong’s latest ballot for the sale of second-hand subsidised housing was oversubscribed by just five times – the lowest demand since the programme known as the White Form Secondary Market Scheme, started about a decade ago. This seeming decline in popularity, alongside the increased affordability of private housing, has led some to claim that subsidised housing is no longer needed.
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There has indeed been a growing overlap between Hong Kong’s subsidised and private housing markets. In 2021, both markets saw first-hand transactions valued at around HK$3-5 million (US$384,250-640,430). This widened to HK$1-5 million last year, as private home prices fell by close to 30 per cent from the peak in September 2021. This suggests increasing options at the lower end of the private housing market for those eligible for public housing.
On closer scrutiny, however, the options may not be as plentiful. Last year, there were only 521 first-hand transactions in the HK$1-3 million range in the private housing market – but 106,000 applications to buy subsidised housing under the Home Ownership Scheme.
Moreover, the more than 40 per cent of Hong Kong households earning less than HK$25,000 a month can only afford homes that cost no more than HK$3 million. For them, subsidised housing is still the primary route to home ownership. The mission of public housing to fulfil the homeowning aspirations of low-to-middle-income families remains relevant.
Subsidised housing also facilitates the turnover of public rental housing. It gives renting households with improved financial conditions an opportunity to buy a home – releasing their rental flats for those in greater need.
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Even with the crackdown on tenancy abuse, the number of public rental flats recovered from the serving of termination notices is far surpassed by the number released by those who had moved on to buy subsidised flats – by anywhere from 47 per cent to 323 per cent in each of the last five financial years.
