Why Hong Kong’s property slump may be best time to focus on public housing

With one in two Hongkongers locked out of the property market despite falling prices, it’s time to move towards the Singapore model of providing public housing for more people, not only the poor

We can start chipping away at the problem by improving the design and quality of public housing, and allowing more Hongkongers to be eligible

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Dennis Lee

Dennis Lee is a Hong Kong-born, America-licensed architect with years of design experience in the US and China.

Published: 9:30am, 9 Mar 2024

Who is hurting in Hong Kong’s weak property market? The government? Yes, because land premiums and stamp duties historically make up a significant part of government revenue.

Last week, Finance Secretary Paul Chan Mo-po revealed revenues of HK$19.4 billion (US$2.5 billion) from land premiums in the current financial year and HK$50 billion from stamp duty. These were, respectively, just 30 per cent and 60 per cent of the estimated HK$65.6 billion and HK$85 billion. This shortfall is equivalent to nearly 80 per cent of the HK$101.6 billion deficit projected.

But the administration itself does not suffer – it is the people it serves who do, when funding for public services, infrastructure projects, welfare programmes and relief measures are affected.

Are property developers hurting? Yes, because they are sitting on excess inventory that they can neither sell nor rent out. In the third quarter of last year, the number of vacant new properties reached a near-20 year high, according to property agency Centaline.