Home sweet home — against all the odds
As HK’s housing prices continue to scale new heights, young people aiming to own a home are looking to the government to help them realize their dreams. Luo Weiteng reports.
If the ever-growing army of Hong Kong people, who have lost all hope of owning a roof over their heads, want some solace, they may have well found some comfort in a strong adherent, who firmly believes that owning a home isn’t everything in life.
To many of them, the words “home ownership” may have long vanished from their vocabulary, with no end in sight to the city’s skyrocketing property prices that have now catapulted far beyond their reach.
Steven Lam Hoi-yuen — one of the city’s budding young entrepreneurs who co-founded local logistics startup GoGoVan, which went on to become Hong Kong’s first $1-billion “unicorn” through a merger with Chinese mainland freight group 58 Suyun — was, apparently, stunned to find that the prevailing mentality of owning an apartment in Hong Kong does take ample precedence over a feat like his in getting a multibillion-dollar business rolling.
At a recent press conference announcing the merger, the thirty-something entrepreneur was bombarded with questions from reporters like “when will you use your new-found wealth to buy a flat” — a query that continues to hang like the “sword of Damocles” over the heads of many ordinary folks in the region.
Rubbishing the perception that owning a house is the first and foremost testimony to success in life, Lam blatantly shot it down, telling the city’s young people to “aim high and dream big” to succeed in life rather than pressing themselves against the wall in what could be a futile pursuit of a home.
“If I had ever followed the big trend and joined the army of home-mortgage slaves years ago, there would have been no GoGoVan that’s going to reshape Hong Kong’s traditional logistics business landscape,” he blared.
“I’m a man born to do something great. So I’d rather stay in a Kowloon public housing estate where I grow up, leaving home ownership to the millions of Hong Kong people who need it far more than I do.”
Overcrowded Hong Kong has already earned for itself the dubious honor of being crowned the world’s least affordable place to live in for the seventh year running, and it’s really encouraging to see a young man from a grassroots family refusing to bow to the pressure of putting a home above everything else, remarked Fielding Chen Shiyuan, a Hong Kong-based economist at Bloomberg Intelligence.
He called Lam “brave and tenacious enough” to launch
Hong Kong-born undergraduate student at City University of Hong Kong
his business from scratch, and eventually made his mark.
“But, let’s face it. When the urge to place a roof over your head becomes an elusive dream, something that could easily take a local medianincome family up to 20 years to make it real, how could ordinary people in Hong Kong ever expect to pursue other big dreams?” Chen asked.
Gloomy picture
United Kingdom-based financial advisory group Oxford Economics has painted an even gloomier picture for aspiring home owners.
In an analysis of price-toincome ratios across the globe, it concluded that it would take an average of up to 35 years for a household with median income to purchase and pay off a 90-square-meter (970-squarefoot) apartment.
Chen moaned that Hong Kong’s over-reliance on the realestate sector as one of the twin pillars of the local economy has allowed deep-pocketed developers to snatch away the surplus value of the whole society, leaving Hong Kong not much room to maneuver, but to stick to the property-fueled economic trajectory.
He called the local housing problem a “chronic disease” that cannot be cured overnight. Hong Kong’s policymakers also have their hands tied in trying to seek a panacea, and there’s no shortage of property owners who are more than glad to see housing prices on a tear.
“Hong Kong’s runaway housing market makes us dare not dream big,” said Millie Chan Kam-lee, a translation major in her senior year at the City University of Hong Kong.
“For ordinary young people from a grass-roots family like Sources: Hong Kong Federation of Youth Groups, HSBC me, who would likely become an average wage earner rather than an entrepreneur after graduation, owning a big house has to be on the top of my list of big dreams,” she said.
The 23-year-old undergraduate lives with her parents and a younger brother in a publichousing rental flat on Tsing Yi, forking out a monthly rent of HK$3,000. The family moved into the two-bedroom apartment in 2004 after having waited for six years — far longer than the average three-year queue promised by the Housing Authority.
“Every time we meet up with friends, we just can’t avoid the subject of owning a home cropping up in the conversation,” Chan said. “We keep talking about it not because we’ve set about buying a home, it’s just because we are awfully stressful and hopeless, facing the prospect of never ever owning a home.”
She said the anguish of staring at full-page local newspaper advertisements trumpeting record-shattering property deals or transactions every now and then has exacerbated their misery.
“You just feel the urge to dig out your family’s life savings and get onto the housing ladder to avoid being flushed out by the outrageous prices.”
According to a survey of 800 respondents conducted by the Hong Kong Federation of Youth Groups late last year, just above a quarter of millennials aged between 18 and 24 intended to buy a flat — down from 55 percent in 2006 — and many of them expected to work for up to 25 years before taking the plunge into ownership.
This was dwarfed by the 70 percent of youths on the Chinese mainland who aim to become first-time homebuyers, and a global average of 40 percent, according to a study by HSBC in April this year.
With policymakers in 12 major mainland cities offering a host of sweeteners to sell the idea that renting a home is as good as owning one, Chan said it still takes quite some time for the market to buy the argument.
“After all, living under the roof of my own rather than of the landlord makes me feel far more secure although Hong Kong’s rental housing market is well regulated,” she noted.
Chan now casts a glimmer of hope on Carrie Lam Cheng Yuet-ngor’s new administration, which has introduced a fresh bout of livelihood policies since taking office in July, in a sign of its determination to rein in the city’s ever-escalating property prices and tackle a years-long housing crunch.
As part of an election pledge by Hong Kong’s new leader, the “Starter Homes” scheme — a new form of subsidized sale flats highlighted in Lam’s Policy Address last week — aims to help the city’s young and firsttime homebuyers — the socalled sandwich class who earn too much to qualify for purchasing the traditional governmentsubsidized flats, and yet cannot afford private housing — get on the housing ladder.
In a bid to prod the city’s 775,000 households living in public rental housing to move up the property ladder and vacate their units for 280,000 applicants on the waiting list, Lam also proposed increasing the supply of subsidized sale flats exclusively to tenants of public rental housing.
Task force created
“Basically, when we talk about Hong Kong’s housing conundrum, we can never steer clear of the issue of land supply. An acute shortage of land supply has long been cited as the culprit in Hong Kong’s high-flying real-estate market, where prices have been rising for 13 months by September and soared 21 percent in the year through June,” Chen said.
To bolster the SAR government’s supply-led approach, a task force, consisting of 30 people from broad-ranging professional backgrounds, was set up to figure out ways to ramp up land supply in Hong Kong.
“However, the mere setup of the new land search committee has already been a source of controversy. Not to mention how to reach a public consensus on freeing up more land ready for residential development in the space-starved territory,” said Cheung Kiu-cho, Hong Kong-based deputy managing director of Asia valuation and advisory services at Colliers International.
“When I heard of the remarks from GoGoVan’s Lam, my first response is to question the eligibility of the young entrepreneur and his family for staying in the Kowloon public rental estate, rather than mourn a housing problem that suffocates the entrepreneurship of the city’s young generation.”
The SAR government passed tougher rules in February this year to kick out better-off public housing tenants to make way for those with “genuine” needs, pointing to an implicitly acknowledged fact that not a few households earning several times more than ordinary public housing tenants still occupy the scarce units.
“For the umpteenth time, there are calls for well-off tenants to be forced out of subsidized homes, but nobody has the guts to do it. Without a mechanism coordinating the interests of all stakeholders, and providing the community with a much wider range of options and alternatives, it’s common to see different new policies running into constant controversy,” Cheung told China Daily.
“So you can see the logic of the new administration is quite clear — putting the focus squarely on helping different groups of people climb the property ladder. What matters is the well-off tenants, when evicted from public housing estates, also get solid policy support to rent private-sector homes or buy property. That’s exactly where the subsidized sale flats and Starter Homes could come in,” he added.
“The difficulty in carrying out the ‘well-off public housing tenants policy’ is just the tip of the iceberg. Basically, each stand-alone proposal will have tens of thousands of reasons for objection,” said Cheung. “But controversy centers on how to source ‘developable’ land in Hong Kong, whether it be reclamation or building on the fringes of country parks. There’s essentially no dearth of proposals put on the table, but no one dares to make a move and pick one.”
In her election manifesto, Lam said she shared a strong sense of empathy as she herself had grown up in a tiny flat, so much so she had to do her homework on a bunk bed.
“As a few decades have passed, nothing much has changed. There’s no shortage of young children in Hong Kong still living in sub-divided flats and doing homework on their beds,” said Franklin Lam Fankeung, founder of HKGolden50, a non-profit policy think tank. “From this point of view, we can say the city’s housing policy has barely made any progress, or has even gone backward.”
“We squeeze into a per-capita living space of 170 square feet, which is six times less than that of Singapore and half as much as that of the Chinese mainland,” Lam said. “But we’re too numb to cry out loud — ‘Is this right?’”
Cheung agreed that the government’s housing policy has proven to be more or less unsuccessful and inefficient over the past few decades.
“The point is whether the new administration truly has the nuts to press ahead with the proposed new measures and eventually seek compromise between a mixture of vested interest groups and those excluded from the property ladder,” he noted.
“More often than not, however, we’re not trying to reach a public consensus. There’s merely a grudging agreement among the vested interest groups with their own agendas.”
For the umpteenth time, there are calls for well-off tenants to be forced out of subsidized homes, but nobody has the guts to do it.”
Hong Kong-based deputy managing director of Asia valuation and advisory services at Colliers International