Download - Housing in Hong Kong - the Good, the Bad and the Ugly

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Page 1: Housing in Hong Kong - the Good, the Bad and the Ugly
Page 2: Housing in Hong Kong - the Good, the Bad and the Ugly

HONG kong

“One China, Two Systems”

China

Page 3: Housing in Hong Kong - the Good, the Bad and the Ugly

Contents

1. Housing Supply Issues 2. The Governments Approach 3. Examples of Housing – Good vs Bad 4. Summary 5. Questions and Answers

10 mins

Page 4: Housing in Hong Kong - the Good, the Bad and the Ugly

1. HOUSING SUPPLY Issues

Page 5: Housing in Hong Kong - the Good, the Bad and the Ugly

HIGH Population DENSITY

/ =

5385 Persons

per km2

area Population

1068KM2 6.9M

Data Source: Yuen and Yeh (2011)

Page 6: Housing in Hong Kong - the Good, the Bad and the Ugly

70% of Hong Kong

is countryside

75% of Hong Kong

is HILLS and Slopes

HIGH Population DENSITY

Source: Agriculture, Fisheries and Culture Department (2014)

Page 7: Housing in Hong Kong - the Good, the Bad and the Ugly

HIGH Population DENSITY

Source: Agriculture, Fisheries and Culture Department (2014)

Page 8: Housing in Hong Kong - the Good, the Bad and the Ugly

Government Controlled LAND

In Hong Kong land is government owned. It is subdivided before being leased to private developers. One of the main sources of income to the government is the sale of leases through auction and tender. It represents up to 30% of government income.

1.

2.

3.

4.

Data Source: Nissim (2011)

Page 9: Housing in Hong Kong - the Good, the Bad and the Ugly

THE RESULT:

Increased LAND prices

Page 10: Housing in Hong Kong - the Good, the Bad and the Ugly

High House Prices

0

5

10

15

20

25

World Average

Hong Kong

4.3

23.6

Global House Price Index

2012 to 2013

Ch

an

ge

as

%

Rank

12-month

% Change

6-month %

Change Country

Data Source: Knight Frank (2013)

Page 11: Housing in Hong Kong - the Good, the Bad and the Ugly

High House Prices

$50,000

$40,000

$30,000

$20,000

$10,000

$0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

GDP PER CAPITA

Data Source: Google Public Database (2014); World Bank

Page 12: Housing in Hong Kong - the Good, the Bad and the Ugly

HONG

KONG AS

10

PEOPLE

HONG KONG

Total

Income

Income Inequality

Poorest Richest

Data Source: Chi-Fai (2012), South China Morning Post

Page 13: Housing in Hong Kong - the Good, the Bad and the Ugly

Income Inequality

$60,000

$50,000

$20,000

$10,000

$0

$70,000

$40,000

$30,000

$80,000

GDP PER CAPITA

Vs

National average salary

GDP PER CAPITA

National average salary

Data Source: United Nations (2013)

Page 14: Housing in Hong Kong - the Good, the Bad and the Ugly

THE RESULT:

Lack of Affordability

Price to income ratio

27.06 U.k. Average 7.74

Affordability Index

00.57 U.K Average 1.73

Data Source: Numbeo, 2014

Page 15: Housing in Hong Kong - the Good, the Bad and the Ugly

2. GOVERNMENTS APPROACH

Page 16: Housing in Hong Kong - the Good, the Bad and the Ugly

Increasing Supply of Housing

“the community endorses the recommendation that the Government should adopt a supply-led strategy, continuing to increase housing supply and enhance the role of public housing.”

2014 Policy Address, Para 141

Page 17: Housing in Hong Kong - the Good, the Bad and the Ugly

Increasing Supply of Housing

29.7%

17%

52.8%

Public Rental

Subsidised Home Ownership

Private Permanent

Temporary

Population by housing type

(Currently)

Data Source: Information Services Department (2013)

Page 18: Housing in Hong Kong - the Good, the Bad and the Ugly

Focusing on Public Housing

“The new target is to provide a total of 470 000 units in the coming ten years, with public housing accounting for 60%. To meet the new housing supply target, the Government aims to provide an average of about 20,000 PRH units and about 8,000 HOS units per year”

2014 Policy Address, Para 142

Def. PRH: Public Rental Housing HOS: Subsidised Home Ownership Housing

Page 19: Housing in Hong Kong - the Good, the Bad and the Ugly

Focusing on Public Housing

Ap

pli

ca

nts

on

Wa

itin

g L

ist

114,400

152,500

189,500

228,400

0

50,000

100,000

150,000

200,000

250,000

1 2 3 42009 2011 2012 2014

“Government aim to maintain the current waiting time for public housing (avg. 3 years)"

Data Source: South China Morning Post

Page 20: Housing in Hong Kong - the Good, the Bad and the Ugly

Densification

Increasing Permitted Plot Ratios

Except for the north of Hong Kong Island and Kowloon Peninsula, which are more densely populated, the Government considers it feasible to generally increase the maximum domestic plot ratio currently permitted for the other “density zones” in the territory by around 20% as appropriate.

2014 Policy Address, Para 122

Def. Domestic Plot ratio: A measure of site-to-building levels (Chapter 2, Hong Kong Planning Standards and Guidelines)

Page 21: Housing in Hong Kong - the Good, the Bad and the Ugly

Densification

Increasing Permitted Plot Ratios

Plot Ratio: 1.5 Plot Ratio: 3 Plot Ratio: 6

Plot Ratio: 5 Plot Ratio: 8

Tai Wo Ping Kowloon Tong Quarry Bay

Hung Hom Ma On Shan Sai Wan Aberdeen Centre

Source: City Planning Consultants Ltd (2005)

Page 22: Housing in Hong Kong - the Good, the Bad and the Ugly

Densification

Rezoning and Infill Development

The Plan Departments is conducting a new round of Area Assessments of Industrial Land in the

territory, which focuses on the industrial and commercial sectors’ demand for land and space,

and will rezone for residential use the industrial land near residential areas where industrial

activities have greatly reduced.

2014 Policy Address, Para 134

Page 23: Housing in Hong Kong - the Good, the Bad and the Ugly

Increasing Supply of Land

Rezoning and Infill Development

The Government has identified about 80 additional Green Belt sites and Government, Institution or

Community (GIC) sites in various districts with a total area of over 150 hectares with the potential to be

rezoned for residential use.

2014 Policy Address, Para 120

Page 24: Housing in Hong Kong - the Good, the Bad and the Ugly

Reducing Market Demand

Tax Introduced

Properties worth below HK $2 million

now incur stamp duty of 1.5%

Properties worth above HK $2 million

now incur stamp duty of 8.5%

Tax Doubled

Page 25: Housing in Hong Kong - the Good, the Bad and the Ugly

3. Examples of Housing

The Good

The Bad

Page 26: Housing in Hong Kong - the Good, the Bad and the Ugly

Subdivided Housing

Page 27: Housing in Hong Kong - the Good, the Bad and the Ugly

171,300

66,900

228,400

Number of people living in

subdivided flats

Number of subdivided flats

Number of applicants on

waiting list of for public housing

The Numbers

Data Source: Wilson Housing Authority

Subdivided Housing

Page 28: Housing in Hong Kong - the Good, the Bad and the Ugly

Subdivided Housing

Bathroom

Bathroom

Kitchen

Bathroom

Kitchen

Bathroom

Bathroom

Kitchen

Living Area

Balcony

Staircase

Entrance

Original Apartment Modified Apartment

Apartment 2

Apartment 3

Apartment 4

Apartment 1

Exit to staircase blocked

Nearest exit is to far away from

Apartment 1

Internal walls are unlikely to be

fireproofed

Corridor is too narrow

Bathroom is installed on the

balcony

Page 29: Housing in Hong Kong - the Good, the Bad and the Ugly

Subdivided Housing

Hong Kong 45

China 60

United Kingdom 76

Japan 95

Canada 181

USA 201

Subdivided Housing

20m2

Average Housing

Unit Size

Data Source: Wilson (2013)

Page 30: Housing in Hong Kong - the Good, the Bad and the Ugly

Subdivided Housing

Page 31: Housing in Hong Kong - the Good, the Bad and the Ugly

Subdivided Housing

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Subdivided Housing

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Caged Homes

Page 34: Housing in Hong Kong - the Good, the Bad and the Ugly

“Caged-homes” are categorised as “Bed-space Apartments” by the Hong Kong Government.

The term “Bed-space Apartment” refers to a house

that contains 12 or more people who rent individual bed spaces.

It is legal to run Bed-space Apartments, but property

owners must obtain a special license from the Bedspace Apartment Ordinance.

Caged Homes

Page 35: Housing in Hong Kong - the Good, the Bad and the Ugly

Caged Homes

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Caged Homes

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Caged Homes

Page 38: Housing in Hong Kong - the Good, the Bad and the Ugly

Caged Homes

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Public Housing

Page 40: Housing in Hong Kong - the Good, the Bad and the Ugly

Pu

bl

ic H

ou

sin

g

Lei Cheng UK Estate Tsz Wan Shan Estate Sau Mau Ping (I) Estate

Wah Fu Estate Ma Hang Estate Cheung On Estate

Tak Tin Estate Wo Ming Court Chung Ming Court

Ho

usi

ng

De

pa

rtm

en

t (2

01

4)

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Pu

bl

ic H

ou

sin

g

Mark I Mark III Mark V

Twin Tower Harmony Rural Slab

Trident Concord New Cruciform

Ho

usi

ng

De

pa

rtm

en

t (2

01

4)

Page 42: Housing in Hong Kong - the Good, the Bad and the Ugly

Pu

bl

ic H

ou

sin

g

Ho

usi

ng

De

pa

rtm

en

t (2

01

4)

33.1

to

39.9

17.0

to

52.5

11.7

to

53.1

21.5

to

65.1

23.1

to

46.5

10.6

to

52.2

11.8

to

55.6

39.0

to

60.0

37.0

to

59.0

Flat Size

(m2)

Page 43: Housing in Hong Kong - the Good, the Bad and the Ugly

Public Housing

Data Source: Housing Authority. Google Street view.

Community Space

Access

Arts and

Green Space

Playground

Recreational

Space

Secured Entrance

Page 44: Housing in Hong Kong - the Good, the Bad and the Ugly

Private Housing

Page 45: Housing in Hong Kong - the Good, the Bad and the Ugly

Price to buy: £1.89 Million (UK Pounds) Price to rent: Unknown Description: 3 x bedroom Type: Semi-detached house Location: Semi-urban Facilities: 24-Hour Security, Clubhouse, Sauna and Jacuzzi, Swimming pool, Golf range, Child playground and pool.

Saleable area

177 Square Metres (m2)

Private Housing

Source: Centadata (2014). Yuen Property Agency (2014).

Page 46: Housing in Hong Kong - the Good, the Bad and the Ugly

Price to buy: £777,000 (UK Pounds) Price to rent: £3,700 (UK Pounds) Description: 2 x bedroom Type: Low rise apartment Location: Semi-urban Facilities: 24-Hour Security, Equipped kitchen.

Source: Centadata (2014). Richland Property (2014).

Private Housing

Saleable area

122 Square Metres (m2)

Page 47: Housing in Hong Kong - the Good, the Bad and the Ugly

Private Housing

Price to buy: £1.5 Million (UK Pounds) Price to rent: £2,929 (UK Pounds) Description: 3 x bedrooms Type: High-rise apartment Location: Urban Facilities: 24-Hour Security, Clubhouse, Gym, Swimming pool. Equipped kitchen.

Source: Centadata (2014). Squarefoot HK (2014).

Saleable area

125 Square Metres (m2)

Page 48: Housing in Hong Kong - the Good, the Bad and the Ugly

Pros: Ability to socialise. Affordability. Cons: Security issues. Lack of space. Hygiene and sanitation standards. Male dominated. Extremely low quality of life. Increased risk of mental illness and other health issues. Lack of facilities. No privacy.

1.

2.

3.

4.

Pros: Affordability. No waiting time. Cons: Safety issues. Lack of space. Hygiene and sanitation standards. Lack of facilities. Inadequate ventilation and associated health problems.

Ranking (In My Opinion)

Pros: Affordability. Amenities. Security. Quality of life. Cons: Affordability. Property size.

Pros: Affordability. Amenities. Security. Cons: Safety issues. Lack of space. Social stigma. Limited supply. Eligibility.

Average Earner

Page 49: Housing in Hong Kong - the Good, the Bad and the Ugly

Summary

Government Approach: Increasing housing stock. Increasing public housing to 60% to meet current demand (3 years

and rising) and to address affordability issues. Densification through rezoning, infill development, increasing

plot ratios and greenfield development (where permitted). Cool the private housing market by reducing the demand from

foreign investors (through increasing costs and tax)

Housing Issues: Hong Kong has a limited amount of land. Purchase of land has a high administration costs. Houses prices are high because of a large amount of foreign

investors (from mainland China and beyond) Housing is not affordable to the local population.

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Yuen, B., Yeh, A. (2011) High-Rise Living in Asian Cities. Springer Agriculture, Fisheries and Culture Department. (2014) Hong Kong the Facts: Country Parks and Conservation [Online] Available at: http://www.afcd.gov.hk/english/country/cou_lea/the_facts.html (Accessed 27 February 2014) Knight Frank. (2013) Residential Research – Global House Price Index [Online] Available at: http://resources.knightfrank.com/getnewsresource.ashx?id=c802b446-9d21-49ec-b338-0b06ec826d98&type=1 (Accessed 30 February 2014) World Bank (2014) Public Data – GDP Per Capita 1960 to 2012. [Online] Available at: https://www.google.co.uk/publicdata/ Chi-fai, South China Morning Post (2012) The Good, The Bad and The Dirty. [Online] Available at: http://www.scmp.com/article/1005287/good-bad-and-dirty (Accessed: 30 February 2014) Nissim, R. (2011) Land Administration and Practice in Hong Kong. 3rd edn. Hong Kong University Press: Hong Kong.

United Nations (2013) Human Development Report [Online] Available at: http://hdr.undp.org/en/media/HDR_2013_EN_complete.pdf (Accessed: 30 February 2014) Numbeo (2014) Property Price Index by Country [Online] Available at: http://www.numbeo.com/property-investment/rankings_by_country.jsp (Accessed: 02 March 2014) Information Services Department (2013) Population – The Facts [Online] Available at: http://www.gov.hk/en/about/abouthk/factsheets/docs/population.pdf (Accessed: 02 March 2014) http://online.wsj.com/news/articles/SB10001424052702303661904576452982242744572 South China Morning Post (2014) More Young People Drawn to Public Rental Housing [Online] Available at: http://www.scmp.com/news/hong-kong/article/1395251/more-young-people-drawn-public-rental-housing (Accessed: 28 February 2014)

References