3. ALCANCE
3.8. ALUMBRADO
The findings of the questionnaires indicate that 44% of the young singlet respondents had no plan to buy self-occupied flat and chose renting as their preference tenures and a bare majority (56%) of the respondents had plans to buy self-occupied flats.
For those who had no plan to buy self-occupied flat, 42% of them selected “they could not afford to buy at high housing price” as the main reason. 32% of them chose the main reason as “not want to be bound by long term mortgage commitments”. This implies that affordability is the major reason of young singletons not to buy self-occupied flat because no one can share their mortgage responsibilities and they will face higher risk of mortgage default if they loose their job or their incomes reduce. Moreover, young singletons want more flexibility and mobility of their accommodation. So, they do not want to be bounded by long term mortgage commitment. They choose to meet their housing needs by renting or staying with their parents. Most of them (29%) prepared to spend 30%-39% of their incomes on rental payments. It reflects that private renting is very costly and account for a large proportion of incomes of young singletons who have little working experiences and may change jobs frequently. Those who cannot afford private housing has to stay with parents.
The low homeownership aspiration rate of the young singleton respondents matches with the findings of the survey made in July 2013 that about 30.4% of young respondents had plans to buy self-occupied flat in 5 years time; 23.2% had no idea/no opinion and 46.4% had no plan to buy (notflatslave, 2013). According to government statistics, from 2001 to 2011, there was a large increase of renting households from 38% to 47.1% for households with the ages of household heads among 25-44 (Hong Kong Economic Times,
29.8.2013). Currently, fewer young singletons choose owner occupation as their best housing option. Most of the respondents planned to buy self-occupied flats because they wanted to get marry, to have long term secure home and to improve living environment.
Most of them planned to buy self-occupied flats when they were 30-39 years of age because they had to save the down payments for buying their own flats as the housing prices were very high in recent years. Moreover, when young singletons were getting older, they would attain higher education levels or accumulate more working experiences. Thus, their incomes would be higher that raise their ability to fulfill their homeownership aspirations. In view of the high housing prices, 59% of them prepared to use 40% or more of their monthly income for mortgage payment. The findings to a large extent match with the phenomenon discussed in the literature review and conceptual framework that there is reducing homeownership rate for the young people internationally (Mckee, 2012) and the median age of second-had HOS flat buyers is 46 for Secondary and 39 for Open Market (HKHA, SHC 60/2012).
The questionnaires survey findings show that 30% of the total respondents would or have lived apart from their parents. According to the 2011 Population Census, there were 1,535,661 young persons at the age between 20 and 34 and there was a social tendency that young persons would live apart from their parents when they were independent financially (Census and Statistics Department, 2012). The rise in the single person households is to a great extent due to the progress to adulthood of the life-cycle and the rise of individualism (Horsewood and Neuteboom, 2006). To some extent, young singletons of Hong Kong act in accordance with life-cycle trajectory in their choice of housing tenure. Moreover, the time of unmarried status of young singletons is lengthened and so as the transitional period.
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For factors affecting the choice of housing tenures by young singletons, the findings of questionnaires survey indicate that their social and economic backgrounds have different impact on their decisions of housing tenures. The age of the respondents has some influence on their choice of housing tenure. At each different age group, those who had plans to buy self-occupied flat are slightly more than those who had no plan to buy and applied for PRH. There is a slight decrease in percentage for those who had no plan to buy and applied for PRH with the increase in age, i.e. from 45% in the age group of 18-24 to 40% in the age group of 30-34. It is obvious that the percentage of the respondents applied for PRH decreases with age. However, it may imply that the income directly related to age and experience. At elder age 30-34, the income of young singleton exceeds the maximum WLIL for one-person household. Education level and average monthly income have significant impact on young singleton’s decision on housing tenure. Conversely, there is a slight increase in the percentage of those who had plans to buy self-occupied flat with the increase in age, i.e. from 55% of those in the age group of 18-24 having no plan to buy to 60% of those in the age group of 30-34.
Education level of the respondents is another factor affecting their decisions of housing aspiration. The higher the education level attained and the higher income earned by the respondents, the more of them had homeownership aspirations. 67% of the respondents attaining/attained university education or above had plans to buy self-occupied flat. And, most of the respondents having income more than $14,970 (i.e. the maximum WLIL for two-person household) had plans to buy self-occupied flat. It implies that tenure choices for young singletons are very limited, i.e. either owner occupation or renting. For those attaining/attained university educations, they have higher prospect to get secure jobs and stable rise of their incomes annually. Once their incomes exceed WLIL, they
have no choice except to buy self-occupied homes even though their incomes are marginal or insecure because private renting is expensive and marginalized. On the other hand, for those who had secondary education, 79% of them had no plan to buy self-occupied home.
It can be explained that it is not easy for them to get secure and high income jobs with their low education level in the current knowledge-based economy. Their working experience will be obsolete with the advance of technology and structural change of the economy and job markets. They could not afford and are vulnerable to buy self-occupied flats.
Moreover, social backgrounds of the respondents also affect their housing needs and aspirations. More male than female respondents had homeownership aspirations. This reflects the traditional Chinese philosophy that man has the responsibility to set up a secure living place for his family. More than half of the male respondents, who had plans to buy self-occupied flat, chose marriage as their main reason to buy self-occupied home.
Furthermore, those living in family owned flats would mostly have homeownership aspirations. 64% of those living in family owned private flats comparing to 50% of those living in family owned government subsidised flats had homeownership aspirations. It implies that the families of those living in self-owned private flats are more affluent than those living in self-owned government subsidised flats. Their families will encourage and provide financial support to them for buying self-occupied flats. Conversely, most of those living in private rental flats (67%) had no plan to buy self-occupied home. Their families will less likely provide financial support to them for buying self-occupied home. They are indifference to live in private rental flats. Therefore, they have no plan to buy self-occupied flat.
Furthermore, the findings of the questionnaires survey show that gender and the
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household size of the respondents will affect their intention to move out from family before marriage. More male than female respondents will live apart from parents before marriage.
Moreover, for those respondents in larger household size family, more of them would move out before marriage because they wanted to have privacy and improve their living environment. The findings concur with the findings of 2011 Population Census that there was an increase in the number and proportion of one-person households because more young singletons tend to live apart from their parents when they could afford the cost of living independently.
In addition, the findings of the in-depth interviews indicate that the personalities and careers of the respondents also have impact on their housing needs. For example, the university graduate respondent got used to live independently from parents in university hostel and liked quiet environment. He moved out from parents’ home and lived independently once he got a job as programmer in Central. He shared a rental flat with another young person in order to save housing expenditure and planned to buy his self-occupied flat after about ten years. Moreover, the post-secondary graduate worked as graphic designer. He wanted to have his own space at home for design at night without disturbing his younger brother at night. So he planned to move out and live independently once he could find a friend or colleague to share a flat with him in order to share the rental expenses of a flat.
Regarding the expectation of young singletons on the government, the findings of the questionnaire survey indicate that most of the respondents expected that the government could provide subsidies both in-kind and in-cash to young singletons. The government could build more self-contained small PRH flats and increase maximum annual PRH
allocation quota to non-elderly one-person applicants under QPS as well as raise the WLIL because most of them had incomes exceeding WLIL but could not afford private rental housing not to say purchase of private housing. On the other hand, the government could build more subsidised sale flats for young singletons so that lower and middle-income households could buy their self-occupied flat at more affordable price. Generally, the government should increase land and housing supply in order to stabilise the property market otherwise the housing price would continue to increase in the long term.
Furthermore, they hoped the government to take initiatives to provide financial assistance to young singletons whether they planned to buy self-occupied flats or chose renting e.g. introducing loans to first time buyers, relaxing 70% loan-to-value mortgage restriction and introducing tax allowance on rental payment. This implies that in face of the high housing prices both sale prices and rental prices of private housing, the young singletons expected the government should introduce measures to assist them financially.
Most of the respondents agreed that youth hostels could provide interim housing for young persons who need to move out from parental homes. Moreover, the rents of youth hostels at about 40% from market price enable young singletons to save money during their stay in the hostels so as to plan for their future long term housing arrangement. Although the rents for youth hostels are higher than those for PRH, the income limits for Youth Hostel Scheme are higher than the WLIL for PRH. It will be more suitable for working young singletons. As young singletons especially those with higher education have better opportunities to improve their earnings after a few years’ working, youth hostels can serve as transitional housing that enable young singletons to live independently and concentrate on their career development that in turn will have positive impact on the economic
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development of Hong Kong. Moreover, the accessibility of subsidised rental housing by young singletons will be increased and the government will not over-subsidise those young singletons with higher ability and affordability because of the fixed term of tenancy.
However, there may be housing problem for those young singletons leaving youth hostels but could not afford private housing. The government has to make comprehensive planning to assist them in finding suitable housing tenure according to their affordability.
Generally, young singletons supported the government to co-operate with private developers in the provision of subsidised sale flats as it could increase supply of housing.
However, they have reservation on the type of government-private co-operation because it might assist private developers in obtaining substantial gains from the developments. So, the government has to consult and plan thoroughly before co-operating with the private developers.
5.6 Overall discussion
As mentioned above, there were about 1.54 millions young people at ages among 20-34 in Hong Kong. Many low-income young singletons resort to apply PRH. There were about 126,200 applicants under QPS and that were more than 121,900 general family applicants as at March 2014 (HKHA, 2014b). However, the offer of PRH to non-elderly one-person applicants under QPS is according to the scores reached by individual non-elderly person applicants (in other words depending on the age of non-non-elderly one-person QPS applicants) and restricted by the maximum annual quota of 2,000 flats. The accessibility of young singletons to PRH is highly restricted not only by the extreme low income and asset limits but also by the QPS. It is not uncommon that the waiting time of non-elderly one-person QPS applicants is more than eight years.
Those young singletons with incomes exceeding WLIL have to meet their housing needs by private renting or buying. However, private renting has many shortcomings such as insecurity of tenure, uncontrolled rent increase and poor quality housing. Private renting is marginalized in Hong Kong. Owing to the high housing price and the high volatility of private housing market, many young singletons cannot afford to buy flats in private housing market. The tenure choices available to young singletons are very limited. Then, they have to stay with parents longer even though they want to live apart from parents to enjoy privacy and independence or to improve living environment.
The findings of the questionnaires survey and in-depth interviews reveals that housing needs and aspirations of young singletons have gone plural because of their differences in education levels attained, income levels, security of jobs, family backgrounds, views on marriage, etc. The government has to understand the housing needs and aspirations of the young singletons in order to introduce diversified housing policy and measures in assisting them to meet their pluralist housing needs and aspirations.
The government can adopt a tenure neutrality approach and encourage tenure diversity housing policy. So, the government will even out subsidies on different tenure choices, increase tenure choices, increase accessibility of public housing by young singletons and review QPS to allow more open and fair allocation of public housing resources to young singletons. Hence, young singletons can choose their desirable housing tenures according to their affordability and not by the inducement of more subsidies provided by the government or social discrimination of renters and homeowners.
In the long term, the government can develop a suitable government and private form
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of cooperation in the provision of housing. Thus the market can provide different types of housing needed by the young singletons but not the type of housing most profitable to the private developers or investors. Moreover, the government can consider supply-side subsidies as stated by Oxley and Smith (1996) in the literature review to provide grants, cheap lands etc. to Hong Kong Housing Society or NGOs to reduce their cost to provide housing for young singletons so as to increase housing choices by young singletons who have incomes exceeding WLIL but cannot afford private housing. In the short time, the government has to cease speculative activities in the housing market by regulation in order to maintain a stable and sustainable housing market.
Moreover, the findings of the questionnaires survey and in-depth interviews show that young singletons expect the government to provide them with financial assistance in meeting their housing needs and aspirations. In the literature review, Oxley and Smith (1996) state that demand-side subsidies e.g. tax reduction or cash subsidies will increase demand for housing. In time of shortage of housing supply, the housing price will be pushed up. To grant financial assistance to young singletons has to be further studied by the government.
The housing needs and aspirations of young singletons have ever been neglected by the government. The unsatisfied needs of young singletons may sow the seeds of tense family relationships, dissatisfaction with the government and social instability at large. The government should recognize the housing needs and aspirations of young singletons, so as to devise a comprehensive housing policy to assist them in selecting the right tenures according to their affordability.