Sebastian Man

Opinion | Beijing can end Hong Kong’s housing crisis by brokering a deal with land owners and developers

If Hong Kong’s government called such a meeting, it would meet serious resistance. But if Beijing brokered the deal, it could ensure agreement and possibly offer the sweetener of a mainland land swap

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Sebastian Man

Published: 9:00am, 5 Oct 2019Updated: 9:04am, 5 Oct 2019

Hong Kong is facing an unprecedented crisis since returning to China in 1997, with various studies highlighting housing shortages and stretched affordability as major culprits.

Average annual housing supply has fallen from around 71,000 units from 1985-1996 to 43,000 units since 1997. The average living space per person in Hong Kong is 161 sq ft. This compares to 210 sq ft in Tokyo, 270 sq ft in Singapore and 300 sq ft in Shenzhen.

Studies have shown that in the 22 years since the handover, the accumulated housing shortage has reached 300,000 units and is likely to hit 500,000 units by 2028.

It takes a skilled worker 22 years to afford a 600 sq ft flat in Hong Kong, compared to a median of seven years in major international cities. Based on the land supply mechanism, it could take 11-14 years to develop a non-spade-ready site, 10 years for land reclamation and at least five years for land conversion.

Despite repeated public outcry over housing shortages, plenty of land has been sitting idle for years, primarily farmland in the New Territories. The top four developers in Hong Kong collectively own over 100 million sq ft of farmland. This could be used to build over 600,000 flats with an average size of 500 sq ft, assuming a plot ratio of three times, more than satisfying the estimated shortage of 500,000 units by 2028.