This is an unfortunate distinction:
Of all the world’s housing crises, Hong Kong’s may be the most formidable. The city of 7.3 million leads the world in housing prices and inequality, with 125,100 millionaires and 1.6 million people living in poverty. Home prices have rocketed by 187% over the last decade. In May, the number of public housing applicants hit 245,000, with an average wait time of 6.1 years — the highest in over two decades. According to lawmaker Scott Leung, a shortage of 30,000 units in the next five years means that the public housing queue will soon stretch to 6.5 years.
So let’s take a look at overall housing supply (source):
What this chart tells us is the following:
- For the five-year period from 2017 to 2021, Hong Kong built about 173,900 housing units. That’s somewhere around 34,780 per year.
- Of these units, 60,700 were subsidized public rental housing units (~35%) and 25,500 were subsidized sale units (~15%). So overall, about half of Hong Kong’s housing supply over the last five years was some form of subsidized housing. That said, the number of public rental housing units has been declining. It was about 70,800 units between 2007 and 2011.
- Looking at private residential units during this same five-year period, about 35,200 of them (20% of total supply) can be classified as “small units.” These are units with an area less than 40 square meters and, based on the above chart, they obviously represent a rapidly growing market segment.
- Adding all of this up, we get to 70% of Hong Kong’s housing supply being either (1) a subsidized unit or (2) a small unit under 40 square meters.
This is how Hong Kong builds, and it clearly isn’t enough to meet demand.