LCQ7: Supply of and demand for public and private residential units

     Following is a question by the Hon Audrey Eu Yuet-mee, and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (November 30):


     At the meeting of the Panel on Housing of this Council on 7 November this year, the Government indicated that the projected planning target of an average annual supply of 40 000 public and private residential units in the future was derived based on the number of people on the Waiting List for public rental housing, the distribution of population growth in Hong Kong, the volume of private residential property transactions over the past 10 years, as well as the data in the final report of the "Hong Kong 2030: Planning Vision and Strategy".  In this connection, will the Government inform this Council:

(a) given that the Government is implementing measures to gradually ban the sub-division of flat units (commonly known as "sub-divided units") on the ground of building safety issues, and on the other hand, the Chief Executive pointed out in this year's Policy Address that, such "sub-divided units" at the same time provide accommodation for low-income people not eligible for public housing, and there have also been comments that "sub-divided units" are one of the indicators which reflect the potential housing demand in Hong Kong, whether the current methods for projecting housing demand have taken into account such potential housing demand; if so, based on what data the Government made its projection; if not, the reasons for that;

(b) of number of "sub-divided units" in Hong Kong according to the existing statistics compiled by the Government, with a breakdown by the size of households living in "sub-divided units", average monthly income and occupation; and

(c) whether the data based on which the Government made the aforesaid housing supply projection have covered the various types of potential housing demand in Hong Kong; if not, whether the Government will review afresh the current methods adopted for projecting the housing demand in the light of the potential housing demand in Hong Kong, and adjust the projected future supply of public and private residential units based on the outcome of the review?



     The Government and the Housing Authority's objective is to provide public rental housing to low-income families who cannot afford private rental accommodation, with the target of maintaining the average waiting time of general Waiting List applicants at around three years.  After consulting the relevant policy bureau, our consolidated reply to the three-part question is as follows:

(a) and (c) Housing demand includes demand for public housing and private housing.

     Public housing demand is affected by a basket of factors, including population growth, rate of household formation etc.  On population growth and household formation, we adopt the population projection and household formation projections of the Census and Statistics Department (C&SD), which cover households and population living in different types of housing in Hong Kong.  Moreover, we make use of the income distribution of tenant households in private sector, based on findings from the General Household Survey conducted by the C&SD, to project the number of households satisfying the Waiting List (WL) income limit for public rental housing (PRH), which also cover households living in various kinds of premises in private market.  Together with other relevant factors, including redevelopment programmes, number of applications on the WL, number of PRH flats being recovered, etc, a projection would be made on the total and average number of new PRH units required in the coming few years, under the overarching principle of maintaining the average waiting time for general WL applicants at around three years.

     On the demand for housing in the private market, our experience is that the hard figures estimated by any model could not accurately quantify demand, especially as the demand in the private residential market may be affected by many factors, including changes in socio-economic environment, such as market sentiment, liquidity and interest rate, etc.  It is very likely that any estimation would be very different from the actual situation.

     Notwithstanding the above, our aim is to ensure an annual supply of land for an average of about 40 000 residential units of various types, including about 20 000 private residential units, 15 000 public rental housing units and 5 000 New Home Ownership Scheme flats.  Even when demand for land declines, land development will continue.  The newly developed land will be kept in the Government's land reserve and made available when appropriate.  By doing so, we will be able to supply sufficient land when demand rises.

(b) As regards the statistics requested in respect of sub-divided units, the Government does not have detailed figures on the number of sub-divided units and occupants living therein.

     The objective of the Buildings Department's enforcement action against sub-divided units is to ensure that such units will not pose building safety problems.  The Government understands that sub-divided units provide accommodation for some low-income people and therefore would not ban sub-divided units across the board.  The relevant government departments will also ensure that no households will be rendered homeless as a result of government action through the provision of appropriate assistance to those in need, which includes Social Welfare Department to consider referring such cases to the Housing Department for Compassionate Rehousing according to the individual merits of each case.

Ends/Wednesday, November 30, 2011
Issued at HKT 14:01