Urgent need to fix flat shortage amid soaring prices: LamLocal | Sum Lok-kei 3 Aug 2017
Flat prices have reached a "worrying state," and it has now become urgent to tackle the housing shortage, Chief Executive Carrie Lam Cheng Yuet-ngor says.
Despite increased housing supply, the government's property price index rose 9.3 percent in the first half of 2017, while the prices of private properties have climbed for the past 15 months, Lam said yesterday.
"In reality, the rise in income cannot catch up with the rise in property prices, so the difficulty in purchasing flats is an issue we have to address immediately," she said.
She added that Hong Kong families were spending on average 66.1 percent of household income to pay mortgages in the first quarter, as reflected by the latest Median Mortgage Payment and Loan Repayment to Income Ratio.
And the flats aren't even particularly large, Lam noted.
According to government's figures, 98,000 new flats are to be put on the market within the next three to four years.
While the SAR doesn't lack land, there is no consensus over its development, Lam said.
To help achieve a consensus, Secretary for Development Michael Wong Wai-lun will establish an expert-led task force this month and start a "grand debate" on housing supply, she added.
Lam hoped the panel will find answers to Hong Kong's housing issue within a year, including locating land sources for development.
Wong said the first meeting could be held next month, and that it will be chaired by a non-official individual.
The "grand debate" will begin with different proposals to increase land supply, he said, adding it would be impossible to find a solution that every citizen in Hong Kong will support. Therefore, the debate will outline the pros and cons of each proposal, and test their feasibility.
Wong did not directly respond to a question on whether the public will be consulted, saying only the task force will be in touch with "various stakeholders."
Meanwhile, he said the government is looking at replanning 210 sites to shore up short-term land supply.
Midland Realty chief analyst Buggle Lau Ka-fai agreed that the mortgage-to-income ratio shows the poor affordability of flats in Hong Kong, and urged citizens not to rush into purchasing properties in light of the high prices.
Lau said land supply is not the only factor that will affect the housing market.
If the interest rate in Hong Kong remains low with a sustained demand for flats, Lau said an increased land supply may not bring prices down.