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Note : Latest available data are presented. The figures in parentheses represent
the year to which the data pertain.

Sources: Official Statistics of Japan, Statistics and Census Service Macau,
Department of Statistics Singapore, Kim (2014), Statistics Sweden, GOV.UK,
and National Low Income Housing Coalition.

2.2 The Problem with Proper ty

Ownership

As Table 1 and 2 show, Hong Kong has a massive public sector
housing programme on a scale that is unprecedented in free-market
economies. It is undeniable that the government of Hong Kong is the single
largest landlord, developer, and operator of housing within the territory.
While Hong Kong is often compared with Singapore in terms of housing
policy, the two housing programmes are critically different because of their
different policies on homeownership and tenancy rights.

Singapore has allowed for the establishment of an active market
in public sector housing for rental, as well as for sales and purchases. The
units are rented and sold to eligible households at subsidised prices. After
five years from the date of effective purchase, owned units can be sold on
the open market to eligible permanent residents of Singapore. In addition,
the owner of the units can even sublet the unit, in whole or in part, on
the open market. As a consequence, there has been no impediment to
Table 1. Domestic households by type of housing, 2015
the emergence of a market for public sector housing both for renters and
owners.

In Hong Kong however, restrictions have rendered the market
for such units effectively non-existent and non-functional, with grave
socioeconomic consequences far beyond housing issues. This is because
unlike Singapore, the so-called “subsidised” sales flats in Hong Kong is not,
in fact, subsidised. The prevailing mechanism of subsidised sales flats is as
(*) Subsidised sales flats that can be traded in open market are excluded.
Census and Statistics Department. follows:
(i) Assume a subsidised sales unit has an estimated market value of $1
million (HK$, same hereafter unless otherwise specified). It is first sold
at a “discount” of, say, 30% against the market value (i.e. $700,000) to an
eligible household satisfying the relevant means test;

(ii) The government also acts as the guarantor for the said property,
allowing the household to obtain a mortgage up to 95% of the
discounted price (i.e. $665,000);

(iii) The unpaid 30% of the house’s market value (i.e. $300,000), is
commonly termed the “unpaid (land) premium”, and is payable to the
government when the unit is sold in the open market in the future
upon satisfying other requirements; and

(iv) The value of this unpaid premium is determined with reference to the
market value not at the date of occupation of unit, but at the time
when repayment is to be made. For example, if home prices double
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