Book Description

This dissertation, "Relationship Between Subsidized Housing and the Private Housing Marketin Hong Kong" by Tak-kin, Lau, 劉德健, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract The Hong Kong Housing Authority (HKHA) is a statutory body responsible for providing subsidized housing in Hong Kong, which accommodates about 50% of the population. Subsidized housing mainly includes Public Rental Housing (PRH) flats, Home Ownership Scheme (HOS) flats, and Private Sector Participation Scheme (PSPS) flats. PRH flats are intended for rental to the lowest income groups, while HOS and PSPS flats are for sale to middle income groups. Since subsidized housing plays such an important role in Hong Kong, this study will examine the relationship between the supply of subsidized housing and private housing's market performance. Two hypotheses are set. One is that an increase in the supply of subsidized housing would lower the price of private housing. The other is that the negative effect of PRH supply on housing prices is stronger than that of HOS/PSPS because PRH offers greater subsidies and involves a larger segment of the population, despite its more stringent entry criteria. Regression analysis was used to test the hypotheses. Quarterly data from 1980 to 2002 was collected. Since property prices are likely to be affected by factors other than the supply of subsidized housing, variables such as rental levels, unemployment rates, interest rates, and private housing completion were included as controls. The regression results showed that increasing the supply of PRH and HOS/PSPS produced a negative effect on private housing prices. Moreover, the negative effect of PRH is significant at the 5% level, while that of HOS/PSPS is not. This may imply that controlling the supply of PRH, rather II than HOS/PSPS, is a more effective way for the government to influence private housing's market performance, given that the costs of controlling both are similar. This can be done by altering the supply of PRH, adjusting the subsidized rental rates, or changing the entry criteria. The other implication of the study is that the government may also take measures to drive the demand for private housing, because rental levels, unemployment rates, and interest rates are significant factors affecting private housing prices. A fundamental recovery of the economy is important for stimulating the general public's demand for property investment. A deep understanding of the implications from different types of public housing and other demand factors should help policymakers formulate better policies for the housing market. III DOI: 10.5353/th_b3527847 Subjects: Housing - China - Hong Kong Real property - China - Hong Kong