It is a fact few can deny: Hong Kongers are living in increasingly small homes that are also getting more expensive. As the government pushes to build ever more units on greenbelt land, quality of life is certain to suffer.
A common story among citizens is the regret of not buying house in the 2000’s when HK’s property market began to heat up. The prevailing belief is that the ship has now sailed and property ownership is out of reach for most. The prospect of living in ever-smaller apartments, as the rent increases exponentially, paints a bleak picture for those of us that love Hong Kong and wish to stay.
It can be asked why we didn’t buy at that time but in truth the rapid property price increase at a time of stagnant wage growth following the financial crisis of 2008, caught most citizens unaware. Talk of a property bubble kept ordinary people waiting for the “pop”. This left working people in an ever-worsening situation with few options. This led to an increase in emigration to high-wage countries where less money could buy a bigger house and the possibility to trade up in future. Those that wish to stay in HK realize that’s not how real estate works here.
In overseas developed economies, at least those not caught in a property bubble, you are usually rewarded with bigger and better houses as you progress up the economic and career ladder. Your quality of life, at least at home, will improve over time, assuming that you stay healthy and the economy continues to build.
This formula is not true in Hong Kong; most of us are living in flats smaller or similar in size than the ones we grew up in, even if we have well paid jobs. That’s because long ago, the city made a bargain with the devil…
We have always tried to pack as many flats as possible into our space-starved city; let quality of life be damned. Especially now, the government’s very legitimacy rests on improving home affordability and providing more flats. But things will only get worse, assuming the government succeeds in meeting its targets over the next decades.
Officials project building 470,000 public and private units between now and the second half of the next decade.
In a sign of things to come, just look at the proposed development density at two new public housing estates in Fanling North and Kwu Tung North. They are expected to offer a total of 48,400 flats between 2023 and 2031, a proposed increase of 34 per cent, but only by tweaking the development density of the areas. We can expect more such density adjustments at the expense of public amenities and neighborhood quality in the coming years.
An old flat of just 395sqft in Sha Tin, has just sold for HK$5.85 million. Thanks to our Faustian bargain, anyone who owns a flat is likely to be a multimillionaire. If economics is all about trade-offs, you are rewarded with capital gain on your property in Hong Kong, not improved quality of home life.
At least you can be rich on paper…