Cheaper private flats in Hong Kong don’t erase need for subsidised housing

Hong Kong’s latest ballot for the sale of second-hand subsidised housing was oversubscribed by just five times – the lowest demand since the programme known as the White Form Secondary Market Scheme, started about a decade ago. This seeming decline in popularity, alongside the increased affordability of private housing, has led some to claim that subsidised housing is no longer needed.

There has indeed been a growing overlap between Hong Kong’s subsidised and private housing markets. In 2021, both markets saw first-hand transactions valued at around HK$3-5 million (US$384,250-640,430). This widened to HK$1-5 million last year, as private home prices fell by close to 30 per cent from the peak in September 2021. This suggests increasing options at the lower end of the private housing market for those eligible for public housing.

On closer scrutiny, however, the options may not be as plentiful. Last year, there were only 521 first-hand transactions in the HK$1-3 million range in the private housing market – but 106,000 applications to buy subsidised housing under the Home Ownership Scheme.