PUBLIC HOUSING IN SINGAPORE & HONG KONG

Abstract

Singapore and Hong Kong are reputable for their success in providing public housing for their populations. To date, 86% and 46% of Singapore and Hong Kong populations reside in public housing respectively. While Hong Kong has 21% of the population staying in Home Ownership Scheme (HOS) flats, 89% of Singapore's population bought their flats. This study attempts to identify and evaluate the factors which would influence households' decisions to purchase or rent. Data collection is performed by conducting surveys in both Singapore and Hong Kong on public housing tenants and purchasers. Survey results revealed that affordability, pricing, waiting time and location were the main factors deterring tenants from buying their own flats. A study on price trends showed that flat prices in Singapore has appreciated 100% from 1983 to 1994. Hong Kong's public housing price appreciation rate was 400% during the same period. The demand for public housing is greater than supply in both Singapore and Hong Kong. The under-supply situation is more acute in Hong Kong where applicants have to wait more than ten years before obtaining their flats. The analysis on financing of HOS flats revealed significant differences between Singapore and Hong Kong. Financing in Hong Kong largely depends on banks, charging high interest rates of 9 to 9 5% per annum. Singapore's HDB loan charges only 3.92% per annum. This greatly enhance the affordability of Singporeans to purchase public housing Moreover, the CPF scheme and various grants provided by the Singapore government further encourage purchasing of HOS flats. This report concludes that Singapore has a more conducive environment to purchase public housing reflecting the different goals of the two governments. Though Hong Kong has been rather successful in meeting the needs ofthe poor by providing affordable rental flats, more could be done by increasing supply and providing more financial assistance schemes to flat purchasers.