**********************************

Following is a question by the Hon Lee Wing-tat

, and a written reply by the Secretary for Housing, Mr Dominic Wong, in the Legislative Council today(Wednesday):

Question:

As the economy of Hong Kong has shown negative growth in each quarter this year and there is generally a fall in people's income, will the Government inform this Council whether, based on the housing demand model formulated by the inter-departmental Working Group on Housing Demand in January 1997, it has re-computed the housing demand of the public from now until 2005-06? If so, please give a breakdown of the figures by classifications of public and private housing and by different components as listed in the schedule.

Reply:

Madam President,

The Government's latest assessment of housing demand was made public in February 1998. According to the projections for the ten-year period from 1997-98 to 2006-07, total flat production requirement is 799 000 flats, comprising 456 000 flats in the public sector and 343 000 flats in the private sector. In order to take into account the effect of the recent economic downturn and initiatives in housing policy, we shall commission a new survey of housing aspirations within this year. Its findings will be used to update the data and assumptions used in calculating the earlier projections. As stated in the 1998 Housing Policy Objective, we intend to publish the projection results in 1999.

While it is too early to anticipate the results of this exercise, it is clear that the main effect of the economic downturn on housing demand is to suppress demand for private sector housing in the short term. Because the Government's assessment model is designed to project housing demand based on long term population growth, such projections are not likely to be affected significantly by short term changes in the economic climate.

End/Wednesday, November 11, 1998

NNNN