Introduction

Welcome!

We are a group of students from City University of Hong Kong. In this blog, we will be analyzing the housing problems and policies in the various countries, like Singapore, Taiwan, Hong Kong, Burma and Pakistan.

To make navigation easier, please click on the following links to read about the housing in the different countries.

• Singapore 
• Taiwan 
• Hong Kong
• Burma
• Pakistan 

For the description of the civic issue (housing) written by us, please click on the following link:

• Description of the Civic Issue

We also have compiled news commentaries from both the professional media and the citizen journalists. Please click on the following links to navigate.

• Professional Media
• Citizen Journalism

Lastly, we have provided an in-depth analysis and comparison of the housing in the countries listed. 

• Words from Editor

For easy navigation, you can click on the labels on the right hand column of the blog.

We hope that you managed to get a sneak peek of the various housing issues in the different countries covered by this blog. 

Thank you for reading!

Cheers,

The Housing Team of GE3202

Words From Editor

After a thorough analysis of the information collected by our group, we conclude that the problems faced by developed countries are very different from what is faced by developing countries.

The following is a brief analysis of the similarities and differences in the housing situations in Singapore, Hong Kong, Taiwan, Burma and Pakistan.

Developed Countries (Hong Kong, Taiwan, Singapore)

"With development and economic progress, high housing prices are inevitable."

The most common problem faced in developed countries is the high housing prices.

The reasons for the high housing prices are often very similar in developed countries, as well as the urban areas of developing countries.

1) Land Shortage

In the central of Taiwan, Taipei's housing prices have been increasing at an exponential rate. Due to the job opportunities in Taipei, Taiwanese tend to rent, or even buy, properties in Taipei for convenience. This causes the demand for housing in Taipei to exceed the supply. With the limited land space in Taipei, this forces the market prices of housing to increase at a rapid rate.

Similarly, this problem is also present in Singapore and Hong Kong. The land shortage problem is, however, much more serious in Singapore and Hong Kong, which are way smaller than Taiwan. Hence, the housing prices in Singapore and Hong Kong increase at a much faster rate than that of Taipei.

2) Increase in Population

The increase in population serves as a big problem in small countries like Singapore and Hong Kong, worsening the land shortage situation mentioned in the previous paragraph.

After re-nationalization of Hong Kong, many Mainland Chinese choose to migrate to Hong Kong for the better education opportunities and the Hong Kong citizenship. Being an economic hub of Asia, Hong Kong receives many foreign expats every year too, greatly increasing the number of people in the small country.

Singapore, being in the same situation as Hong Kong, receives many foreign immigrants every year to work. According to the population statistics from the Singapore government in 2011, out of a total population of 5.183million in Singapore, 1.394million are non-residents. This number has been increasing for the past 10 years, worsening the housing situation in Singapore.

The urban areas of Burma (Myanmar) also face the same situation as the developed countries. The influx of foreign entrepreneurs and investors caused the housing prices to rise to a price that is unaffordable to average Burmese citizens.

3) Speculation

Singapore, Hong Kong and Taiwan all face the problem of speculation in the property market where investors buy the houses and resell them at a much higher price in order to make a profit. This causes the market forces to drive up the property prices.

However, it should be mentioned that the problem of speculation is less evident in the public housing sector of Singapore due to the many eligibility conditions that Singaporeans need to meet before they are able to buy public housing.

The policies employed in developed countries to "cool down" the property market are also very similar.

Effective policies employed by Taiwan and Singapore are set with a aim of reducing speculation in the property market.

• In Taiwan, a luxury tax is imposed on the resale of a property bought within certain number of years, reducing the profitability of speculation in the property market.
• For Singapore, the strict eligibility conditions prevent one from owning too many houses at any one point of time, hence, reducing speculation in the market.

 In our group's opinion, Hong Kong can consider the policies in Singapore and Taiwan to prevent speculation in the property market. With stricter policies governing the resale of flats, there would not be additional speculation in the market to drive up the property prices.

Restricting the number of properties that are sold to foreigners is also a good policy adopted by the Hong Kong government in an attempt to cool the property market.

However, while many policies have been implemented in developed countries, property prices are still rising at a faster rate than the income of the citizens.

Developing Countries (Pakistan and Burma)

While developed countries face high housing prices, the developing countries face the problem of poor living conditions.

The reasons behind the poor living conditions in Pakistan and Burma are very different.

The outskirts of the urban areas of Pakistan faces the problem of slums. Slum formation is due to the rapid rural-urban migration, with reasons very much similar to the developed countries (for better job opportunities). Due to the lack of affordable housing for a population that is way too big for the urban cities to handle, slums begin to form. The statistics from "homeless-internation.org" revealed a shocking fact, 48% of Pakistan's urban population lives in slums.  

On the other hand, the poor housing conditions in the rural of Burma is mainly due to political instability. With the high frequency of civil war happening, people have to nomad frequently, not having a chance to settle down.

Burma also faces the problem of land confiscations. Villagers are often forced to move, with little or no compensation, in order to construct dams or for business purposes.

As compared to the developed countries, the reasons behind the housing problems in developing countries vary from country to country. However, the attitudes of the governments are very similar. Indifference. Little is done about the poor housing conditions in the developing countries due to the indifferent attitude of the governments.

A take home message for all

As a country progresses economically, it opens up its economy to the free market forces and welcomes foreign investment. In such a scenario, our group feels that high housing prices are inevitable. The only thing the governments of developed countries can do is to implement policies to slow down the rate of price increase.

However, while the citizens of developed countries are complaining about high housing prices, is it time to stop and think about the poor housing conditions in developing countries? Furthermore, nothing is done to rectify the conditions. 

Burma (Myanmar) Housing

Written by: La Phan

Overview

In Myanmar half of the population lives in the rural areas and the rest in the urban areas. Housing problems faced by urbanites are unaffordable price and shortage of housing supply due to poor management of housing developments. In the rural areas, housing problems take place in very different forms. Housing problems in rural areas are very much concerned with political instabilities as displacement occurs due to ongoing civil wars. Apart from this, many villages have been moved out by land confiscations.

Housing problems in urban areas

Housing prices in urban areas of Myanmar is too high for average wage earners to be affordable. There are two reasons for high prices. Firstly, the housing developers avoid implementing cheap housing project which gives no chance for average income earners other than pay the high price. Secondly, the income of manual employees which is estimated as 1300 USD per year is lower than cheapest housing price.

Table 1: The GDP per capita, 1300 USD, is much lower that the lowest housing price (2011).


Calculated from: http://www.myanmar-housing.com/

Influx of foreign entrepreneurs is also one of major causes that heightens the high price and makes it unaffordable for average income earners. While the income rate still remains unchanged, housing price has been already raised up by rhetoric business interests of foreign investors. Thus, real estates and houses are sold at very high price in the hope of economic boom. Due to these reasons, the housing price has been doubling in recent years.

Housing problems in rural areas

Poor housing in rural areas embraces many problems. Although the cost and price are not big problems for countryside dweller, the standard of houses in rural areas is much too behind healthy environment. Rural houses are so poorly built that they lack sanitation relevancies and hygienic conditions. They are not only lack of necessary facilities, water supply and electricity, but also safety.

The roots of housing problems in rural areas
The reason behind poor housing in rural areas is numerous. Among them political instability is one of major causes for poor settlement. This happens mostly in Kachin, Shan and Karen states, where civil wars are more common. People become homeless or refugees and have to live in very poor conditions, usually temporary huts. Due to the threat of civil wars, people have to nomad recurrently therefore they do not have a chance to settle down in a stable way. This results in poor living conditions. At the end of 2011, there have been about additional 50,000 displaced people in Kachin state alone. Another reason for poor housing in rural areas is land confiscations. Hundreds of villages have been moved out in order to build dam projects and to implement other businesses. For example, implementation of Irrawaddy dam project has caused displacement of about 60 villages located near the project site. Villagers were paid little or no compensation for resettlements. This too resulted in poor living conditions for rural residents.

Defects in Property Rights and Land Laws
Concerning with urban residence, the government not allocating the land in a proper plan since shortage of housing is worsening. The land development is not regulated in accord with the public needs as it favors only to the private land developers and economic interests. Therefore the government should initiate a sustainable land use and set a clear policy guideline in order to meet citizens’ need. For the rural housing problems, the government should better enforce the law the safeguard the property rights of the citizens so as to prevent arbitrary land confiscations. To end the civil wars and build political stability is also crucial to have proper living conditions in the rural areas.

Burma - Article from Citizen Journalist

Due to the media restrictions and strict government policies in Myanmar, we have been unable to find any comments about the housing situations in Myanmar from the citizen journalism's point of view.

Burma - Article from Professional Media

Developers avoid low-cost housing projects

By Htar Htar Khin 
March 28 - April 3, 2011

LOW-INCOME earners living in Yangon face a tough choice – sacrifice a big chunk of their income to live close to downtown, or reside in the outskirts and endure a twice-daily commute.

The five-million-plus residents of Yangon live in an increasingly cramped city, with limited land available for new housing and very little investment in low-cost options for low-income earners.

The land that has recently opened up in Yangon for development – mostly in the downtown area – has been set aside for high-end apartments or condominiums and few construction firms are considering low-income earners.

One company looking to cater to this market is Taw Win Family Construction, says the firm’s chairman, U Ko Ko Htwe.

“The low-cost market is a tough one for developers because keeping prices down means that profits are always going to be thin. It’s a risky business because there’s always the chance that problems will result in a loss,” he said.

However, he said the company began developing its 1300-apartment Muditar low-cost housing complex in Mayangone township this month. He added that making such housing available to low-income earners presented a raft of challenges because he has been working to offer instalment payment plans and pressure banks to offer loans.

The result of such low investment in low-cost housing is a shortage of cheap apartments for low- or middle-income earners.

“Yangon now has more than five million residents and needs more than 200,000 new apartments every year but only 20,000 are built. The gap is huge,” U Ko Ko Htwe said.

U Lazarus, the managing director of Yadanar Shwe Htun Construction, said most developers see no reason to invest in low-cost housing and would not do so unless the government made it worth their while.

“Land is the biggest cost. The cost of building each square foot in an apartment complex is about K15,000 but by the time we’ve bought the land it costs K50,000,” he said.

“It’s true we need more low-cost housing in Yangon but solving that requires government-backed bank loans and cheap land,” he said, adding that Mingalardon, South Dagon, Dala and Thanlyin townships are some of the areas where developers can find large, cheap plots.

U Ko Ko Lay, the director of Three Friends Construction, agreed that land prices were limiting the building of low-cost housing.

“Construction costs are the same whether the project is in Pazundaung or North Dagon township. But the profits for developing in those two locations vary wildly because of how much the land costs,” he said, adding that profits can differ by as much as 40pc in these two townships.

And while it’s cheaper to develop low-cost projects on the outskirts of the city, unless public transport is available, people still won’t buy apartments, he warned.

“The transport options available to clients are a big consideration – if good transport is not available the project will fail and the developer will lose money,” he said.

However, he suggested that if large investments were made in Yangon’s transport infrastructure, traffic congestion would ease and travel times between the outskirts and downtown would be significantly reduced.

He suggested that parts of East Dagon and Pale township (near Mingalardon Garden City) were examples of areas that had development potential but terrible transport.

Daw Cho Cho, a freelance real estate agent in Yankin township, said low-cost housing was also a turn off for wealthier buyers.

“Buyers who have the choice skip low-cost sites because they worry that the buildings are unsafe, particularly in the event of a natural disaster,” she said.

“When buyers spot things like cracked cement floors and walls or exposed iron bars many just walk away, even if the apartment is K5.5 to K8 million cheaper.”

Daw Soe Soe Lwin, 50, has lived in a ground floor apartment at Yuzana Garden City in Dagon Seikkan township since 2004.

“My apartment has so far been excellent even though it only cost me K2.5 million. There have been a few small problems over the six years but it’s no real trouble,” she said.

U Wanna Phyo Zin, 28, who used to travel from North Dagon to downtown for work every day, said the long commute was awful and finally forced him to move.

“The bad transport network made me suffer every day, particularly since no matter what I did I ended up being late to work most of the time.

“Living on the outskirts was painful and I finally moved to Bahan township, even though it costs me a lot more to rent.”

Reference: http://www.mmtimes.com/2011/business/568/biz56805.html

Taiwan Housing

Written By: Song Yen Hsun

Overview

The price of house in Taiwan rise in a extremely speed in these years. Young people who just started to work found it’s almost impossible for them to have their own house in this kind of price level. According to some investigations, people in Taiwan now have to save money without eating anything for 16 years in order to by their own house. Though this may be a little bit too exaggerate from the reality, it still shows the housing price problem in Taiwan now.

Reasons for Rising Housing Prices

Usually the price of house will keep rising because of the population still increase in a high speed and the acreage of land maintains the same. So every country all has to face their problem on the price issues. But the housing problem in Taiwan is very complicated as a result of the inappropriate invests and it started to go out of control.


1) The inappropriate investment
First, the investors created a weird situation called “false demand”, in this situation the demand of houses seems very large than the supply, so the price rise in a high speed within a short period. But the true condition is most of the houses which were in the real estate market are out of use, they just became a kind of goods. 


Real estate investors use their huge capital to buy lots of house and just wait their price to go up after years, than they re-sell the houses at a much higher price. They use this method to earn lots of money in a short time. Actually they didn’t do anything to increase the value of the house, what they only do is spend their money and own the houses for few years to wait for the right moment to resale it again. The result of this is the demand of house seems to be very large due to the investors’ purchasing in the market. But do this house really in used? The answer is no! People who really need to live in this house can’t afford the high price of it, and the people who make the high demand of house don’t live in it.


2) The hot money from China
Second, the hot money from mainland China started to affect the real estate market in Taiwan after the agreement of ECFA and MOE. They used their money to join the trades of houses in Taiwan, which makes the speed of price increasing much more higher than it should be. Although they own the houses, but they don’t live in it just like the investors in Taiwan. The influence of this kind of hot money started to become more and more powerful these years with the highly improvement of China’s economic.


These two reasons lead to the extremely high price of houses in Taiwan.

Related Housing Policies in Taiwan

The government didn’t want to affect the price of houses in Taiwan at first. But after the price started to go out of control, experts in real estate invoked that government should take some actions to stop or slower the speed it rising.


1) Luxury Tax
The government passed a policy related to the real estate market which is called the “luxury tax”. This tax policy charges the investors for a high proportion for 15% of the deal price if the seller owns the house less than one year, 10% for less than two years. Government plans to slower the speed of price increase through decline the inappropriate trades in the market.

2) Other Policies

Taiwan - Article from Citizen Journalist

The price now didn’t match the reality 

Monday, 5 April 2010
by the professor of NCCU張金鶚

The housing price is so high now, due to the “false demand” instead of truly lack of house supply.

These days the house price in Taipei still keep going much more higher, some employee of real estate industry said the way to solve this problem is to improve the public transportation between the suburbs and downtown and increase the house supply in the remote areas. The reason for lacking of houses in Taipei isn’t caused by the supply less than demand, instead of that, there are many houses in Taipei which are out of use. Investors don’t want to sell the house to people who really need to use it if the price is less than the bought price. In addition to the investors, some people afraid that they can’t afford the increasing price, so they urged to buy those houses that are affordable to them. These two reasons make the house price keep rising up.

In the view of economics, the meaning of demand is the one who willing and enable to purchase. Those investors can afford the price but they don’t need live in it; those people who want to live in the house can’t afford the price. This kind of false demand maintains the price in the high level nowadays.

The manager of government about the living area said, because the business cycle just recovered from the recession in the past few years, it’s not the right time to stop the increasing house price. But the price now is too high for those people who really need the house to live in. The reason for not to stop the rising house price isn’t reasonable for experts, in their opinion, if the house price keep in this high level, the cost in house price will have negative influence to the budget they want to spend in other living areas. If the government keeps let the price going up, it will lead to a house bubble.

According to experts’ opinion, the government should try their best to make the price back to reasonable instead of increasing supply and stop let the investors raise the house price through improve the related tax policy.

Reference: http://snail-tw.blogspot.com/2010/04/blog-post_05.html

Taiwan - Article from Professional Media

Housing issue needs to be solved  

Sat, May 01, 2010
By Shane Lee and Liu Ke-chiang (Taipei News)


Housing is one of the most important issues in modern societies. It is a core issue that governments must deal with, but for several decades’ successive governments in Taiwan have failed on this issue. As well as being a basic human need, housing is related to national development, land use and policies, income distribution, government-business relations, social class, human rights, cultural shifts, sustainable cities and so on. Unequal access to housing is a result of many social problems.


The housing policies governments propose give us a glimpse of how they view people’s rights, and of their ability to provide a vision of life in the future. In the past, governments have equated the housing problem with the housing market. They have promoted the distorted phenomena of commoditization and luxurification of housing. Now Taiwan is seeing the warning signs as the “alliance of shell-less snails” (無殼蝸牛聯盟) re-emerges after a 20-year hiatus. Government officials have responded by repeating the mantra of “fostering a sound market,” while seeking to slip out of their own responsibilities and ignoring the market’s failings. This approach cannot assuage the anxiety felt by many members of the public. This raises several points worthy of discussion.


First, the authorities would be unwise to see the “shell-less snails” as representing just a minority, or a point of view confined to northern Taiwan. It should be recognized that the housing problem is a diverse and pervasive issue. Whatever different features the housing problem may have in different places, and whether big or small communities are involved, the main thing is that housing rights are fundamentally and closely linked to many other kinds of rights. In Taiwan, Aborigines’ housing needs are the most obvious sore point.


Following the floods caused by Typhoon Morakot in August, the process of resettling and reconstructing Aboriginal villages has been like an enchanted mirror highlighting the longstanding uncaring attitude of the current and preceding governments to social minorities, their culture and social ties, as well as to land planning and the social significance of housing rights, as well as their incompetence in dealing with these issues.


Second, housing policy reform should not be clumsily simplified in terms of suppressing the housing market. Sharing social benefits does not necessarily mean twisting the arms of the rich. To exaggeratedly interpret reasonable demands for meeting the public’s need for housing as encroaching on people’s property is to limit housing policy and associated problems within the bounds of a market economy viewpoint, without giving any thought to other possibilities. Handing limited land resources over to be manipulated through competition and one-sidedly encouraging real estate businesses that favor big, wealth-flaunting projects is to abandon government’s responsibility for putting a check on inappropriate planning and development under free-market forces. That can only create unending urban problems, and governments will suffer the consequences of their own actions.


In view of this, our first suggestion is to set aside illusions about giving free rein to market
forces and expecting a robust market to solve the problem. The housing situation reflects the dominant social forces of the time. The stress these days is on building luxury homes and market competition pervades. It is time to get back to the level of human needs and to think about the complicated nature of housing.


The government should stress diversity in housing, and it should protect rent-paying tenants of all kinds from being eliminated by market forces and help them to overcome barriers and discrimination, so that they can regain the right to seek quality rented homes. The government should even consider reviving the provision of publicly owned rental accommodation.


The right to a home is a reflection of social relations, including relations of culture and production. In recognition of all the different kinds of families, the government should affirm the existence of mixed use and make regulations to support it. This applies especially to the existence of different grades of housing within local communities, with people from different social classes living within the same diverse neighborhoods. The trend toward uniformity of housing in particular localities should be avoided.


The diverse requirements for housing among people living in Taiwan can be gradually resolved by insisting that developers engage in mixed projects and by keeping their profits at a reasonable level. This could cultivate a sufficiently diverse and sustainable house-building sector, and, at the same time as bringing about an inspiring urban living environment, it would also uphold social equity.


In recent years Western academics researching urban issues have become more and more interested in Asian cities, with their variety and complicated community structure. These are the realities of our cities. A progressive mindset and cultural viewpoint and respect for social changes and diversity are essential in formulating policies that match changes in the natural and social environment and respond to living realities.


Shane Lee is a master’s student and Liu Ke-chiang a professor in the Graduate Institute of Building and Planning at National Taiwan University. Both are members of the organizing committee of the Social Housing Research Center.


Reference: http://www.taipeitimes.com/News/editorials/archives/2010/05/01/2003471919/2

Hong Kong Housing

Written by: Wei Wan Ju (Reasons for High Housing Prices)

                   Anson Cheung (Housing Problems and Government Intervention)

                   Andy Yau (The future of Hong Kong Housing)

Overview

There are currently 2.6 million residential units in Hong Kong, accommodating 2.35 million households.  

• 730 000 households live in public rental housing (PRH)
• 380 000 in self-owned units acquired with government subsidies

In other words, almost half of the households in Hong Kong are benefiting from some form of housing subsidy by the Government.  Of the 1.24 million households living in private properties, 870 000 are owner-occupants.  Taken together, nearly 85% of households live in PRH units, subsidised home ownership scheme flats or their own private properties.

Reasons for High Housing Prices 

1) The supply of land is lack
A decade before 1997, the Hong Kong Government land sales program all required by the Sino-British Land Commission to decide (after 1997 transferred by the SAR Government to decide). At that time, the Commission decided that for an annual can only supply up to 50 hectares of land as the land sales purposes. In that case of limited lands, the land prices raised up. At the same time the Government has been pursuing a high land price policy, lands would be sold to the highest bidder. The Government's 40% of income depends entirely on land sales, so the government was seeking more bid of each sale of land, especially residential land rising. This lead to the premium accounted for 60% of the housing costs even higher. To keep the profits, developers kept raising housing prices. Bring about that people's living quality did not rise while stable economic growth in Hong Kong.

2) The 6 ruling landlords stockpile the lands
The reserve lands of HK government are few. A newspaper did a survey conducted in July 2010 about the allocation of reserve land in Hong Kong. The result is that today the government owned the reserve land about 34.48 million cubic feet. However, the five largest real estate developers owned 46 million cubic feet, more than the government.

The developers stockpiled lands instead of developing, resulting in land soaring.

In the book” Land and the Ruling Class in Hong Kong” referred that, there is a Abolishment/Amendment of Letter A/B policy, which is a Beneficial policy for big developers holding massive undeveloped agricultural lands. The landlords hold the undeveloped agricultural lands instead of developing the lands. They are waiting for government to authorize the land use changing. And while they holding the lands, they won’t be levied taxes. This policy even helps the developers to stockpile the lands.

3) Increasing of population
  After the Second World War, large number of HK people who went to Mainland China returned to Hong Kong. And the breaking out of the civil war forced more people to come into Hong Kong. After wars, Hong Kong's population rapidly increased. Nowadays , Mainland immigrant and Foreign migrant workers move to and settle in Hong Kong legal and illegal settlement of new immigrants, and migrants from the Mainland to Hong Kong. The raising of population make the housing demand much exceeds supply.

4) Real estate speculation from foreign capital
Speculators have been driving up property prices in Hong Kong. According to the Global Property Guide website, demands from mainland China alone constitutes one-fourth of housing market. The other buyers from foreign capital with the very low interest rates and strong capital make the increasing of housing price. The buying frenzy was fuelled by robust economic growth and the very low interest rates in the US.(2010) At first, official in government claimed that only the luxury housing will affect. But the fact is, all the housing prices have been affected.

Housing Problems in Hong Kong

1) Shortage of Housing Units
The overheating of the Hong Kong property market has left the private housing market severely unaffordable and the trend is expected to continue for the next 20 years, according to research carried out by the Royal Institution of Chartered Surveyors. The recently announced My Home Purchase Scheme aims to provide 1,000 housing units a year for the sandwich class populace of Hong Kong. Given the income and asset ceiling requirements of the My Home Purchase Scheme applicants, 35% of total households in Hong Kong are eligible for the Scheme, according to the 2006 Census results.

'So there will be a severe undersupply of these housing units, unless amendments are to be made regarding the income ceiling and/or the amount of housing units proffered, this scheme is not going to address the housing demand of all middle income people of Hong Kong,’ said KK Wong, Chairman of RICS Hong Kong.



2) High Land Rental
With 7 million people and a land area of 1,054 square kilometers, Hong Kong is one of the most densely populated areas in the world. To address land supply concerns, the government plans to speed up their delivery process (all land is owned by the government and leased out to developers) and to encourage the re-development of old industrial buildings.

3) Inadequate facilities / Poor Sanitation
A living unit’s physical condition, its safety, the level of crowding and the quality of the surrounding neighbourhood  all  contribute  to  “poor”  housing  conditions  for  people  living  there.  Therefore, “Bedspace”, “Rooftop structures”, and “Temporary” in both the Housing Authority and the private housing are included in the study’s definition of poor housing because of their less than desirable physical conditions.

When a household shares with others living quarters subdivided into a “Room/Cubicle”, this could fall  into  the category of PH. However, for some households,  this could be a matter of choice  in some circumstances such as those single adults who want to move out of their parents’ home for some  independence  or  to  be closer  to  their  place-of-work.  These more  affluent  room  renters should be segregated from the study’s target group and so the study has classified them as those with a per capita household income above $6,000, which is the SAR median. Using income as a deciding factor is prudent given that PH under most circumstances is due to poverty.


4) Overcrowding
Hong Kong is an extremely crowded metropolis, available lands in inner-city areas around the harbour for domestic or industrial uses had long been exhausted. In view of the situation, the government has gradually begun to give up the laissez-faire policy towards the use of land in the 1950s, planned layouts have been imposed on further urban development, large scale reclamations have been carried out, and new towns have been developed in the New Territories.

The population in certain older urban areas (e.g. Central, Sheung Wan, Tsim Sha Tsui, Yau Ma Tei, etc.) has slightly decreased; however, the problems of overconcentration of population in urban areas, housing deficiency, and lack of space for further development remain unsolved. In 1976, there were still 274,427 squatters in Hong Kong (Hong Kong, 1977). Public housing estates, which provide residence for nearly 2 million people in·1977, allow only a per capita living space of 35 square feet for their dwellers (in old
type Mark I and II resettlement estate, only 24 square feet). And new towns in Hong Kong are also all of considerable large size in terms of population, and high population density and high degree of overcrowding are being observed.


5) Old and Torn Buildings
The increasing number of decrepit buildings in such districts as Kowloon City, Hung Hom, To Kwa Wan, Ta Kok Tsui an Sham Shui Po has been a stark reminder of the growing divide in the development of Hong Kong. The crumbling of the tenement building has laid bare not just the widening gulf between the rich and the poor but a disjointed government whose capacity in resolving longstanding issues such as old buildings is falter.


6) Slums and Squatters
It’s a part of Hong Kong you can only see from above: rooftop slums home to tens of thousands of people. Unable to afford a regular apartment in Hong Kong’s extraordinarily expensive housing market and forced to wait years for a public housing unit, entire families live in illegal shacks on top of the city’s apartment blocks.

Two years ago, the Hoi On Building in Tai Kok Tsui near Mong Kok in Kowloon was home to more than 100 people living on rooftops, 10 stories above ground. Shacks lined passageways that mimicked the narrow lanes of rural Chinese villages. Some were crudely fashioned out of tin and wood, but many were sturdier, with brick and concrete walls, metal doors and air conditioning units in the windows. Common areas on the roof were filled with drying laundry, potted plants and container gardens.

Government Intervention

To discourage property speculation, the government has intervened decisively.

On 1 June 2010 the government implemented nine market-cooling measures, including: New guidelines for developers requiring full disclosure, and restricting overly aggressive advertisements including the use of “show flats”.

• Developers are required to announce house prices three days before selling any unit, and to disclose transactions involving company executives and their relatives. 

The government raised the stamp duty for luxury homes and promised to increase land supply. It also ensured an increase in the supply of small and medium-sized flats by imposing conditions of future land sales. It held the first land auction of 2010 on Feb. 22.

In August 2010, the government pledged to sell more land to private property developers. It will also supply about 61,000 private housing units over the next 3 to 4 years.

The government will temporarily stop offering residency to foreign property buyers (the Capital Investment Entrant Scheme); instead, it plans to introduce a rent-to-buy program for first-time homebuyers.

It capped residential mortgages worth HK$12 million (US$1.55 million) or more at a 60% LTV ratio (the previous mortgage cap had a HK$20 million (US$2.58 million) threshold).

The Future of Hong Kong Housing

The Government aims to supply sufficient land for the private sector to build a mix of residential units, and provide public housing for low-income people who cannot afford private rental accommodation

When private housing is in short supply and property prices rise to a level beyond people's purchasing power, the Government will intervene and make adjustments through the provision of additional land and through subsidized housing policy.

1) Maintaining Public Rental Housing Production

 The government has the target of supplying an average production of 15 000 PRH units a year. There are 2 ways to accomplish this target.

Firstly, to open up new sites and explore ways to appropriately increase the densities and plot ratios of PRH projects without compromising the living environment. Secondly, those prejudiced objection of some local communities to PRH development should be ignored.

These are measures to meet the target of maintaining an average waiting time of 3 years for General Waiting List applicants. Under no circumstances will this policy be changed in order to ensure social stability and harmony. 

2) Private housing land supply

 The government try to make available land for an average of 20 000 private residential flats each year in the next decade. It aims to build up a sufficiently large land reserve within a certain period to stabilize the supply of residential land. In order to increase the supply of small and medium flats, the government put up the first site with flat number and flat size stipulations last year. The government has already sold few sites with flat size restrictions, which will provide thousands of small and medium flats.  This policy will continue in future.

3) New Policy for Resumption of Home Ownership Scheme

 Its target families are whose household income exceeds the limits for PRH application but not be able to afford owning a private flat. Families with a monthly household income between $20,000 to $30,000, first-time home buyers could apply for the new HOS. Flats with a saleable floor area of 400 to 500 square feet will be offered at affordable prices that roughly be set in the range of $1.5 million to $2 million. It plans to provide more than 17 000 flats over 4 years from 2016-17 onwards, with an annual production of between 2 500 and 6 500 flats. Actual number of flats to be built or put up for sale each year will depend on demand at the time. The first batch of new HOS is expected to be ready for pre-sale in 2014 or 2015.

4) Policy on Land Development and Accumulation

 The government tries to expand land resources of Hong Kong by identifying the following measures:

1. To release industrial land for non-industrial uses, half of which will be made available for housing;
2. To explore the option of reclamation on an appropriate scale outside Victoria Harbour. 
3. To actively explore the use of rock caverns to re-provision existing public facilities and release such sites for housing and other uses. E.g. the relocation of the Sha Tin Sewage Treatment Works
4. To look into the use of green belt areas in the New Territories that are devegetated, deserted or formed and convert them into housing sites.
5. To examine “Government, Institution or Community” sites to avoid the under-utilisation of sites long reserved but without specific development plans
6. To explore the possibility of converting into housing land some 150 hectares of agricultural land in North District and Yuen Long

Hong Kong - Article from Citizen Journalist

Hong Kong property prices and sales soaring despite govt’s real estate cooling measures, figures show

by Ray Clancy on September 13, 2010

Residential property prices in Hong Kong have risen to their highest since December 1997, defying government efforts to rein in real estate speculation and prevent an asset bubble.

The latest index from Centaline Property Agency increased 1.11% to 84.54 in the week ended on September 05, from 83.61 a week earlier.

The report from Centaline, one of Hong Kong’s biggest property agencies, also shows that transactions of used apartments at 10 of Hong Kong’s biggest private developments fell for a second straight week.

The index has risen 1.2% in the three weeks since the measures were introduced in the middle of August after having risen about 13% since the beginning of the year. The figures are causing concern as economists and analysts repeatedly warn of the dangers of a real estate bubble.

The government has increased down payment ratios and accelerated the sale of land for development to rein in home prices that have now surged 45% since the beginning of 2009. Prices are now on par with 1997, the height of a previous bubble that was followed by a six-year slump that sent values more than 50% lower.

‘Any further measures may have only limited impact. Transactions have already declined a bit and price growth has slowed since the measures were introduced. The market has already slowly taken in those measures,’ said Adrian Ngan, an analyst at CCB International Securites in Hong Kong.

The government is closely monitoring the property market and may introduce further measures to contain prices if they continue to escalate. But experts in the industry are not expecting a sudden change. ‘Prices are going to stay around this level in the short term,’ said Centaline associate directors Wong Leung-sing.

Sales are also increasing but high prices are not putting off buyers. Hong Kong’s home sales rose 33% by value in August to the highest in almost three years as the number of transactions completed in the first half of the month outweighed the second-half’s decline, according to the latest figures from the Land Registry.

There seems to be no let up in demand. A 26 year-old government built apartment near one of Hong Kong’s busiest shopping areas sold in July for a record price per square foot. The 420 square foot home in the Sham Shui Po area of the Kowloon district was bought for HK$1.98 million ($255,000).

Prices have exceeded estimates in both land auctions held since the cooling measures were introduced. Kerry Properties, controlled by the family of Malaysian tycoon Robert Kuok, paid 26% more than analysts estimated for land in the Kowloon Tong district last month. Cheung Kong, controlled by Hong Kong’s richest man, Li Ka-shing, paid more than estimated for a site in the nearby Ho Man Tin district four days after the government announced the curbs.

Reference: http://www.propertycommunity.com/property-in-china/697-hong-kong-property-prices-soaring-govts-real-estate.html

Hong Kong - Article from Professional Media

How Unaffordable Is Hong Kong Housing?

July 20, 2011, 12:39p.m. The Wall Street Journal

By Isabella Steger

When investment bankers start pontificating on Hong Kong’s housing and income inequality problems, you know it’s a serious problem.

A story and accompanying video by Polly Hui in the WSJ explores the problem of subdivided flats in Hong Kong as the government pledges it will address public anger over record house prices and reassess land policy. J.P.Morgan has helpfully crunched the numbers in a note, “Unaffordable housing,” to show just how unaffordable housing has become for the general public and why the government’s cooling policies have been ineffective.

For starters, incomes are increasing nowhere near as fast as house prices; median household income in March 2011 was HK$19,100 (US$2451). More than 50% of families earn just HK$20,000 per month, and only 4.2% of households have an income over HK$100,000 a month. Nominal median income for households is 27% less than in 1987. Writes JPM:

A 1,300 sq ft apartment in the Belcher’s (upscale private complex in Hong Kong’s Western district) is equivalent to 11.6 times an income of HK$100,000 per month. Even wealthy households cannot pay for property from income.

Never mind the Belcher’s, even apartments in one of Hong Kong’s largest private estates, the three-decade old Mei Foo Sun Chuen, is out of reach for most, which JPM finds “most disturbing” (not to mention the fact that when the estate was built, it was on the coast—the view is now blocked by the West Kowloon Highway and a container terminal block, it adds). Assuming a loan-to-value ratio of 70%, the initial payment for a 675-square-foot flat would be around four times median household income. Assuming the household saves 20% of its income for the down payment, it would take the household 18 years to save for just the initial payment.

Prices of these so-called “blue-chip property estates” have also exceeded their 1997 peaks, according to JPM, with returns from smaller, medium-priced apartments in the New Territories at 27% on average in the last two years, compared with 15%-18% for more expensive flats in Hong Kong Island and Kowloon.

The culprit is of course, in part, ultra-low interest rates, but the government’s response to lower loan-to-value ratios is counterproductive and has simply “shut out the bulk of the population from the market.” While lower LTVs means lower mortgage payments, the improvement in affordability is deceptive, says JPM, as long as “the denominator remains median income of households.” And with mortgages expected to increase, affordability will only decrease from here (affordability is calculated by property value times LTV times mortgage rates).

The message from JPM is loud and clear: “Hong Kong…needs more affordable housing.” Oh, and buy landlords over developers.

Reference: http://blogs.wsj.com/exchange/2011/07/20/how-unaffordable-is-hong-kong-housing/

Pakistan Housing

Written by: Huzaifa Azim Butt

Reasons for Slums in Pakistan

The rate of rural-urban migration in Pakistan is rapidly increasing. According to Murtaza Haider Assistant Professor of the school of urban planning, McGill University “Over the next 25 years the urban population in Pakistan is likely to increase by 140%. This dramatic increase in urban populations will add another 80 million to the urban population in Pakistan bringing the total urban population to 130 million people” As more people migrate from rural areas to the urban cities of Pakistan, it leads to the formation of slums as there are too many people and simply not enough affordable housing. Such slums grow unofficially in the major cities of Lahore, Karachi, Islamabad, and Faislabad. According to “homeless-international.org” 48% of Pakistan’s urban population live in slums and the total number of people living in slums in 26.6 million.

Video: Stepping into the Slums

Problems Associated with Slums

There are several problems associated with such slums. Firstly, Living areas in such slums are usually very cramped with poor ventilation which leads to health problems among residents. Secondly there is a lack of sanitation facilities leading to extremely unhygienic conditions in the slums, sewage litters the streets; this too leads to health problems among residents. Health problems due to cramped and unhygienic conditions are intensified by the fact they these slums do not have adequate health facilities. Thirdly, since these slums grow without planning and since no proper building codes are followed it make them very vulnerable to disasters such as fire or earthquakes; In January of 2009 a fire killed 40 people in a Karachi Slum. Lastly there is little or no electricity, internet or running water in these slums meaning that residents in slums have a much lower standard of living than other residents of the cities.

Ineffectiveness of Pakistan Government

The problem has gotten out of control due the governments neglect and ineffectiveness. Several City officials do not even acknowledge the fact that slums exist let alone take steps to relocate residents or provide them with the necessary facilities and infrastructure to support an adequate standard of living. What is needed is rapid action in order to provide affordable, safe, properly planned housing for the millions of people living in slums (In Pakistan) today with an adequate infrastructure and other necessary facilities.

Video: Conditions of the Slums in Pakistan

Pakistan - Article from Citizen Journalist

Slums in Lahore

Posted on October 19, 2011
Written By: Danish Mughal From Institute of Communication Studies, Punjab University Lahore

A dirty, unhygienic cluster of impoverished shanties with long lines of people crowding around a solitary municipal water tap, bowling babies literally left on street corners to fend for themselves; endless cries and voices emanating from various corners.

Most of them are engaged in eking out their daily lives, always below the poverty line, by working as construction labourers, domestic helpers, rag pickers and chhotus in neighbourhood colonies. In spite of poor conditions in slums, second generation residents who are not nostalgic about their rural background – feel that life in slum is reasonably tolerable and city life is probably better than rural life.

“Slums are the problems of failed policies, bad governance, corruption in appropriate regulations, dysfunctional land markets, unresponsive financial systems and fundamental lack of political will”.

Lahore the second largest city of Pakistan and is the economic hub of Punjab. According to the population survey, the population of this glorious and magnificent city is more than ten million. Out of this, more than half people are living in the slums, where they don’t have proper food, health, sanitation, living and education facilities, & it is turning out to be the biggest dilemma for our society. Moreover, it is thought provoking for our elected representatives especially for the chief Minister of Punjab Mian Muhammad Shahbaz Sharif who is the constitutional head of the province.

I have personally visited to the slum area (Kachi Abbadi) of Youhana Abad (Christian community) located on Ferozpur Road towards Kasuar District on this weekend. I went to this area whose population is about one million as one of the sources told me. After my personal visit to this place, it came into my knowledge that this is the largest slum or Kachi Abbadi of Asia.

My visit has opened many windows of pain, ignorance, lack of health and education facilities, no proper sanitation as well as no proper infrastructure etc for them. “Our ancenstors born, lived, died while seeing all these conditions, me and my children will also see all this for our whole life”. A forty five years old Josephs Masih who has seven children said.

The people living in this area have only one complain. They complain that whenever the General Elections are announced, the representatives of different political parties always promise them that after winning the election they will address their all the problems but after their success they forget them and those poor people remain lives their lives on the same pattern without having the basic necessities.

On my visit I also observed that there is no water drinking facility for those people and they are forced to drink water from a pound situated just outside their settlements from where animals were also drinking the water.

I want to suggest the Government authorities that they should provide proper sanitation, health, food and education facilities to them with the help of NGO’s and also build cemented houses of two rooms for them so they can live properly.

The problems prevailing in the slums give us the challenge to rebuild a society that is more equitable where equal opportunities could be provided to all for living with dignity.

Pakistan - Article from Professional Media

Slums in Karachi: Cause and Current Situation

Sunday, November 16th, 2008

Written by: Saeed Zaman Shaikh

Poverty is not only having a low income but it is rather scarcity of essential capabilities and that comparative scarcity is related to income which can lead to absolute deprivation this is the argument which is placed by the Amritya Sen. He further says that income is not the only mechanism in extracting capabilities; there are many other social and cultural factors as well. He came up with the term ‘instrumental significance’ for low income whereas; he pointed out the various deficiencies as ‘intrinsically important’.

These intrinsically important factors could be disability and old age which require a bread winner to spend more on that old person or it could unequal distribution of resources or any other socially important reason but the conclusion is capability deprivations and result in migration from rural areas to urban areas for better opportunities.

When these people migrate to urban areas they don’t have proper shelter to cover themselves and they try to have their own shelters and which result in formation of new slum. The table below shows the population of slum areas in Karachi with respect to number of house holds

(Source: Mohib & Hassan. The Case of Karachi Pakistan)

Taking the year 1974 as a yardstick we can find out that, till 1986, the population augmented by 46.12% and the number of households increased by 50.35%, a little more than the population increase. Comparing this up to these last twenty six years from 1976, the total population increase has been 50.13%, whereas, the number of household in these slum areas have risen by 35.68%, having a low trend between 1986 and 2000. However, creating housing units is not only solution in accommodating the less affluent class of our society, rather maintenance issues should be sorted out before thinking of building new ones.

According to the survey by Mohib and Hassan, Karachi is in a need of 80,000 units per year but to negative feature of the uncorroborated problem is that the building permits is only to 27,000 annually. Often, the construction that takes place in the so called ‘Katchi abadis’, is sometimes undocumented and surface way to auxiliary densification. The housing units are developed or in other words maintained solely by the people themselves every year, government support or subsidies are not provided to them. Therefore, the residents of these units themselves pool in for maintenance such as sanitation, water and other necessities needed to make out their living and make both ends meet.

This has gone to the extent that they even have invested in the creation of schools in these slum areas. For instance, in Orangi Town, the population comprises of 1.2 million people and has schooling facilities as well, both private and public. Astonishingly, the private schools even in Orangi Town outnumber public schools. It has been found out that there are 509 private schools and 76 government schools, and out of these 71% of school age children are enrolled in private schools.

When it comes to the health sector, even here, the private clinics out number public clinics with them being 468 and the government clinics having as low a number as 18. They are being run by health visitors and qualified doctors who work both pro bono and for some pay as well. Other health facilities are run by NGO’s in this area.

According to a survey of Ghaziabad (settlement in West Karachi) conducted by Mohib and Hassan, income of 20 households was verified, and it was found out that average income of these households was ranging from Rs. 4,500 to Rs. 6000 with average per capita income being as low as Rs. 500. Highest household income had been Rs. 28,000 and the lowest had been Rs. 1,500 was is extremely low not just as compared to the rising cost of living but according to being a resident of the slums.

This frequently turn into complicated situation to meet the expense of a life when on average the number of children in a residence is 9.5 as habitually families have four children and above. This is also shored up by the fact that the birth rate in Orangi is 40.8 per 1000 people. With this surged birth rate, there will be a need of more and more housing units to lodge these people without merely getting their living conditions improved. The sewage, water and electricity problems continue more often in these areas.

KAIRP has been a significant curriculum for the enhancement and regularization for the slums of Karachi. For the accomplishment of this curriculum, a loan of $ 7.3 million was taken from the Asian Development Bank and the World Bank in 2000 although the inhabitants would deny it. The governments representative have say that relevant work has been completed in slum areas and leases have been issued to 108,245 housing units as compared to a total of 415,000 units. However, there is no declaration of the particulars accessible for any work conceded out through these councilor/MNA/MPA funds because of the nonexistence of monitoring and there is a elevated weight age that these funds may have been distorted. These slum areas are not openly connected with the city infrastructure for the reason that of which improvement programs fail. Saeed Zaman Shaikh

Reference: http://www.daily.pk/slums-in-karachi-cause-and-current-situation-6885/