Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor announced last year that one of her thrusts would be to make home ownership possible for the residents of Hong Kong. She sounded very much like Singapore’s own Lee Kwan Yew, who said in 1964 that he wanted to the nation to become a home owning society.
In a policy address made last October, Ms. Lam said, “We will focus on home ownership to enable our people to live happily in Hong Kong and call it their home.”
Hong Kong has differed from Singapore in that it has kept to an old colonial housing policy where cheap apartments were provided for the poor, and only those in higher economic classes could afford to have their own houses.
Ms. Lam has stuck to her word, with proposals that are similar to the housing system in Singapore. She is making progress in allowing property to be acquired in the most costly property market in the world.
However, at present, there is still a world of difference between housing in Singapore and Hong Kong. In Singapore, 73 per cent of all houses are government-funded homes, while in Hong Kong, the number is only at 43 per cent. Also, in Singapore, 93 per cent of places for sale are funded housing offerings, compared to a mere 33 per cent in Hong Kong. And 91 per cent of households in Singapore live in places that people actually own, as opposed to only around half of the total for Hong Kong.
Ms. Lam’s proposed policies aim to cause subsidized ownership to be more affordable, through pegging mortgages at a fixed prove of 40 per cent per income.
A sociologist at the National University of Singapore, Chua Beng Huat, said, “To the extent that the shift is towards greater affordability in home ownership, it is towards the Singapore housing model.” However, Mr. Chua pointed out that in Singapore, income earners usually pay only 30 per cent of their monthly salary for mortgage. “The 40 per cent income-mortgage ratio is much higher than Singapore and this will deter families from buying public flats,” he said.
Another issue that Ms. Lam faces is of sufficient supply of land, needing 1,200 hectares additionally, and the chief executive is in favor of reclamation. Other Hong Kong officials are not as supportive of this, however.
While Singapore has also made inroads in the area of reclamation, a more important thrust that was made was the Land Acquisition Act of 1966, allowing for the government to acquire property below market price as long as it was for public purposes. To date, the government owns 90 percent of the land.
Acquiring the land is what made public housing possible in Singapore.
Ms. Lam has been hesitant to go in this direction, since mandatory acquisition of land by the government could get tied up in lengthy legal problems, causing a delay.
However, if Ms. Lam wants to make good on her promises to make home ownership available, this radical step may be something she just needs to do.
“If [Lam] wants to learn from the Singapore model, so far she’s only done a half-hearted job at best,” said, Andrew Wan Siu-kin, a Democratic Party lawmaker and Housing Authority member.
Ultimately, it might boil down to building a stable society. Mr. Wan also said, “As long as you are bound to your property, you tend to be less radical.”