Report on Role of Government of Hong Kong in the Housing Market

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With the advancement of technology and tremendous increase in the demands of the people, there has been a wide scale migration of population from the rural towns to urban areas. When there is a huge migration of such population and there is very limited availability of resources in the urban area or city, then there are many issues and problems that are developed. One of the most significant problem that it induces is the shortage of land (Ang, 2015). There is very limited area available in the city for human habitation as the area is used for multiple purposes like industries, recreational activities and other infrastructural amenities.
Housing unaffordability refers to the incapability of the people of a nation to get sufficient and reasonable housing facilities that can be afforded by them and that should possess a good living condition. It is a problem that has been persisting in the rural areas due to the sudden boost in their population (Li, 2014). It has been observed in Hong Kong with very high rates of median multiple of National housing unaffordability as compared to the other cities of the world (Day, 2015). It has been shown in figure 1 in the Appendix.
A similar problem has been observed in Hong Kong where there is a huge scarcity of land availability and it has been observed in the level of price rises and number of construction projects that are increasing considerably (Brownlee, 2015). The people belonging to the labor section and other such low income occupation are on the suffering end with hardly any space to own for themselves. They live in an extremely small space that is far beyond the normal requirements of a human. While living in such conditions, they are never able to rise economically and as a result there is no increase in the standard of living and per capita income of the people in Hong Kong despite of the continuous increase in the number of billionaires in it (Ching, 2004). People do not have their own houses in Hong Kong. It can be observed that about 50% of the population of Hong Kong lives in their own houses, whereas 90% population in Singapore, 67% people in Australia and about 85% in Taiwan live in their own houses (Ang, 2015).
The housing problems can be solved through private housing policies as well as by providing efficient public housing facilities by the government (REFORM OF THE FEDERATION, 2015). There are different problems that have been developed Government plays a pivotal role in the management of the housing availability to the low income groups in Hong Kong. The problems and their solutions that the government should develop for solving or reducing the problem of housing unaffordability in Hong Kong.
Research on the problems
There are many problems that have been developed due to the tremendous boost in the urban population and inefficiency of the government of Hong Kong to provide them with a sufficient standards of living. There are two main problems that are identified and they are:
1. Unaffordability of houses and
2. Quality of life of the people in the available housing
These problems has been discussed in the following section.
Unaffordability of houses
There is a huge gap developed in the house prices and the household of the people in Hong Kong. This has resulted in large scale of unaffordability of houses by the people.
The median developed for the house prices and household income has been shown in figure 2 in the Appendix. It has the following standards for unaffordability of houses:
Affordable: Median Multiple = 3.0 and under
Moderately Affordable: Median Multiple = 3.1 to 4
Seriously Unaffordable: Median Multiple = 4.1 to 5
Severely Unaffordable: Median Multiple = 5.1 and over
According to the above mentioned median multiples, the median multiple of Hong Kong is extremely high at about 14.9 and is the highest among the other cities of the world (STEDU.STHEADLINE, 2015). The median housing price is observed to be HK $4,024,000 which is approx. US $520,000 while that in New York is $405,400 in the year 2013. The median multiple that has been obtained considering the housing prices and the income of the household is about three times more than Tokyo that tends to be one among the most expensive cities across the globe (Chen, 2014).
Quality of life of the people in the available housing
There has been a tremendous fall in the quality of living and other standards of the people in Hong Kong. It has been obtained through different indexes of pollution, income, life expectancy and other such parameters. It was found that the quality of life was deteriorating in Hong Kong. It has been compared with the quality of life in the last decade, that is, last 10 years. It can be seen in figure 3 provided in the Appendix.
One of the most significant factor contributing to the decline in the quality of life of the people is unavailability of houses at affordable prices for the population.
Suggested solutions
There are few solutions that demand a pivotal role and contribution to be played by the government as they are the ultimate owners of the properties and housing enterprise. Government has to develop more number of projects in terms of public housing as compared to the previous years (Delang & Lung, 2010). These housing programs and schemes would be providing solutions to the various problems that are existing due to the unaffordability of houses in Hong Kong. There has already been a tremendous increase in the demand for public housing as observed in 2011. There were about 100,000 public housing applications in 2006 and it increased to about 150,000 in 2011. However, government was able to provide only 15,000 public housing facilities through units (LSE CITIES, 2011). \
Thus, it requires a better planning and execution from the government side to reduce the unaffordability of the houses and decrease the gap that has been developed among the rich and the poor. There are many public housing schemes and programs that accustom to good standard of living and other facilities has to be developed by various means that are available to them. It also has to provide good and reasonable income opportunities to the low income section of the society so as to make them self-sufficient.
Limitations of the solutions
It can already be seen that the lack of land for housing purposes in Hong Kong is a major problem that has to be dealt with (Huang, Shen, & Zheng, 2015). Thus, while providing extensive public housing units, the health of the laborers, construction workers involved in developing the houses as well as the people that would be residing in these houses, is kept at risk. Availability of sustainable living conditions tends to be the major concern and limitation of the government. It should therefore also take measures to increase the income of these group of people as a result of which they would be able to afford reasonable prices which they are not able to in the current scenario.
Ang, B. L. (2015, April 3). Hong Kong Real Estate: Is The Lack Of Land A Myth? Retrieved from
Brownlee, I. (2015, February 2). What housing crisis in Hong Kong? Retrieved from
Chen, L. (2014, October 8). Beyond The Umbrella Movement: Hong Kong’s Struggle With Inequality In 8 Charts. Retrieved from
Ching, S. W. (2004). Housing Problems Accompanying Urbanization (Hong Kong’s Lesson). Centaline Property Agency, 1-6. Retrieved from
Day, B. (2015). 12th Annual Demographia International Housing Affordability Survey: 2016. Performance Urban Planning, pp. 1-56. Retrieved from
Delang, C. O., & Lung, H. C. (2010). Public housing and poverty concentration in urban neighbourhoods: The case of Hong Kong in the 1990s. . Urban studies.
Huang, J., Shen, G. Q., & Zheng, H. W. (2015). Is insufficient land supply the root cause of housing shortage? Empirical evidence from Hong Kong. . Habitat International, 49, , 538-546.
Li, J. (2014). Recent trends on housing affordability research: where. CityU on Cities Working , 1-21.
LSE CITIES. (2011). Hong Kong’s Housing Shame. Society for Community Organization, 1-3. Retrieved from
REFORM OF THE FEDERATION. (2015). Supply, demand and government involvement in the housing market. PART TWO: PRESSURES ON CURRENT HOUSING AND HOMELESSNESS ARRANGEMENTS. Retrieved from
Siu, F. (2016, February 10). Hong Kong property prices are outrageous: why no competitiveness complaints? Retrieved from
STEDU.STHEADLINE. (2015, May 12). Housing – an intractable problem . Retrieved from

Figure: 1 Housing unaffordability graph

(Day, 2015)
Figure 2: House price/ Household Income

(Siu, 2016)
Figure 3: Quality of life in Hong Kong


Posted on

March 9, 2018

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