Pressing need to increase housing supply

Tackling the housing problem is the top priority of the current-term Hong Kong Special Administrative Region Government. I am glad that people in different sectors of the community are concerned about this issue and have put forward their views.

Earlier on, I had some correspondence with Legislative Council Member Mr Gary Fan about the source of the figure quoted by him of over 150 000 residential units currently left vacant. Recently, I received another letter from Mr Fan, raising questions about the vacancy position of residential units in Hong Kong. I have asked my colleague to write to Mr Fan again to clarify his misunderstanding. Separately, I have learnt from an editorial by Mr Lam Pun-lee in last Friday's Apple Daily that he also has questions about the vacancy position of residential units in Hong Kong similar to those raised by Mr Fan. Here I would like to respond to him too.

Both Mr Fan and Mr Lam have arrived at the number of vacant residential units by comparing the statistical figures of "permanent living quarters" in the territory and "land domestic households" published by the Census and Statistics Department (C&SD).

First of all, I must point out that we should refer to the data provided by the Rating and Valuation Department (RVD) if we are to accurately assess the vacancy position of private residential units in Hong Kong. As I said in my blog in early August, according to the figures released by the RVD in the middle of this year, there were about 48 000 vacant private residential units as at the end of 2012, representing the lowest vacancy rate for the past 10 years. As to public housing, according to the latest figures released by the Hong Kong Housing Authority, there were 3 689 lettable vacant public rental housing units as at the end of June this year. As compared to the total lettable units then (comprising the rented units and units which were under offer, as well as lettable vacant units), the vacancy rate was 0.5 per cent. All these figures show that the current vacancy rate of residential units in Hong Kong is extremely low and there is evidently a shortage of supply. In order to satisfy the public's demand for both public and private housing, we need to develop new land on a large scale without delay.

Regarding the C&SD's figures mentioned by Mr Fan and Mr Lam, the figures of "permanent living quarters" and "land-based domestic households" differ in their coverage. Therefore, they cannot be directly compared with each other or used to estimate the number of vacant residential units in Hong Kong. The figure of "permanent living quarters" includes all quarters used for residential purposes in the territory as well as those non-residential quarters usually with people living therein. Since non-residential quarters should not be considered to be used for residential purposes, they should not be counted when we assess the vacancy position of residential units in Hong Kong.

On the other hand, the figures on households from the General Household Survey conducted by the C&SD only covers "land-based domestic households" with at least one Usual Resident. Accordingly, the figure does not include those households consisting of Hong Kong people who have emigrated or are highly mobile, or non-locals who own or rent residential quarters in Hong Kong (such as for short-term accommodation). Moreover, some households own a second home.

As I have just said, to accurately assess the vacancy position of local private residential units, we should refer to the data provided by the RVD.

I believe that there is a consensus in the community that the current housing supply in Hong Kong cannot satisfy the demand. As such, it is necessary for the Government to make available land in newly developed areas to meet the urgent housing needs of Hong Kong people. I sincerely hope that Mr Fan, Mr Lam and all sectors of the community will realise the actual vacancy position of residential units in Hong Kong, and work together to tackle land and housing supply problems with one heart and one vision.

September 11, 2013