Hong Kong House prices
Pasha, Socialist Action
Ordinary working people can no longer find a decent home to live in, especially young people. The number of applicants in the queue for public housing reached a record high of 270, 000 by the end of 2014. Of these, the ratio of young applicants below 30 years of age is also rising every year, from 14.5 percent in 2009 to 26.9 percent in 2012. The housing problem is not only worsening, but is also increasingly hitting the newer generation.
In view of the large number of young applicants for public housing, the government and bourgeoisie commentators have always put the blame on the “laziness” or “lack of ambition” of young people. The fact is, however, working people’s income is unable to catch up with the increase in average house prices. The nominal wage of the average worker has only increased by 10-20 percent since 2001, and real wages in 2014 have actually fallen by 7.4 percent! On the other hand, average house prices are three times their level 10 years ago, and rents have doubled during that period.
17 times yearly household income
According to research done by Demographia, Hong Kong’s house prices are 17 times average annual household income – a figure not only topping the world, but also an historical record! This research holds that a ratio of 3 to 1 is “affordable”, and that the ratio of 6.7 times household incomes in Australia is already worrying. Under such a dire situation in Hong Kong, working people and youths have no choice but to rely on public housing.
Bernard Chan, member of the Executive Council, admitted in an article in the South China Morning Post that Hong Kong’s problem is “extreme”. The Long Term Housing Strategy (LTHS) Steering Committee released a 10-year plan to solve the crisis last year, proposing to build a total of 470, 000 housing units by 2024. Yet, 40 percent will be private housing, and of the rest only 200, 000 will be public rental units (80, 000 would fall under the subsidized Home Ownership Scheme). With an average annual supply of 20, 000 units of public housing, it would take 13.5 years to clear the 270, 000 current applicants waiting in line. Not to mention the more than 30, 000 new applicants for public housing each year.
In fact, the Housing Authority admitted that there will be only 77, 100 new public units available over the coming five years, that is only 15, 400 units each year – far short of the 20, 000 annual target. Moreover, with another government coming to power in 2017, new policies may replace old ones, much like the “85, 000 Policy” of Tung Chee-hwa was discontinued.