HOUSING FINANCE SYSTEM IN SINGAPORE AND HONG KONG

Abstract

Singapore and Hong Kong are both reputable for their economic success in Asia and are often chosen for comparison. One of the popular aspects is their public housing programmes which are considered extensive by international standards. This dissertation will compare and contrast the housing finance systems in both countries from the perspective of the housing demand side. The housing markets in both countries comprise of four main housing tenure choices, namely rental public housing, owner-occupied public housing, rental private housing and owner-occupied private housing. In Singapore, the majority of the households reside in public housing with 82% of them owning their public flats. On the other hand, 46.7% of the Hong Kong households stay in public housing and public home ownership rate was 16.6% of its entire housing market. In Singapore, the HDB provides concessionary rate mortgage loan to eligible flat buyers while the financial institutions provide mortgage loans to mainly private housing buyers. In Hong Kong, the HKHA arranges for 34 financial institutions to provide housing loans while it also offers interest-free loans. This study concludes that Singapore has a more favourable housing finance system than Hong Kong. However, relevant experiences from Hong Kong can be applied in Singapore so as to further enhance its current housing finance system.