Executive Summary
We have released 《Anchoring Talent in the Northern Metropolis: Four Policy Proposals to Help Young Households Put Down Roots in Hong Kong’s New Economic Engine》. The study argues that for the Northern Metropolis to become Hong Kong’s new economic engine, it will need more than housing, railways and innovation hubs. It must also attract young working households to move in, become homeowners and put down long-term roots. Yet many young families, despite having the ability to service a mortgage, still face barriers including high down-payment requirements, limited subsidised homeownership supply, low ballot success rates and flats that are not suitable for long-term family living. The study proposes four measures: reducing the down payment for eligible young White Form buyers of designated Northern Metropolis HOS flats from 10% to 5%; gradually rebalancing the ratio of public rental housing to subsidised sale flats from 6:4 to 5:5; introducing cumulative ballot weighting; and improving flat sizes and family-friendly design—so that young households can afford to buy, have sufficient supply to choose from, stand a realistic chance of succeeding in the ballot, and have homes in which they can stay for the long term.
1. Background
The Northern Metropolis (NM) is Hong Kong’s largest development programme. Its success will depend on whether residents, especially young working households, are willing to move and settle there. Since mid-2014, Hong Kong’s population aged 18 to 39 has fallen by around 324,800. Retaining this generation will directly affect whether NM can become a genuine new economic engine.
Subsidised homeownership has historically helped populate new towns and anchor young families. HOS supply is now improving, and oversubscription has fallen sharply, but the cash deposit remains a binding barrier for many young White Form buyers.
The barrier: White Form buyers usually need a 10% cash down payment, compared with 5% for Green Form buyers. For a HK$2.5 million NM HOS flat, this means HK$250,000 rather than HK$125,000, adding roughly two years of saving at HK$5,000 per month.
2. Findings
The proposal: HKFEI proposes a four-pillar NM settlement package:
- Buyable: reduce the White Form youth down payment in designated NM HOS projects from 10% to 5%;
- Available: progressively rebalance the NM public housing mix from an approximate PRH:HOS ratio of 6:4 toward a 5:5 benchmark;
- Winnable: introduce cumulative ballot weighting for NM-oriented young households;
- Liveable: improve unit size and family-suitable design.
3. Policy Recommendations
Using 2021 Census microdata, HKFEI estimates that there are around 250,100 eligible households related to young White Form applicants. Under broad scenario assumptions, young household demand for NM HOS is around 10,000 to 40,000 households. Relative to likely early NM White Form HOS supply, this demand scale should be sufficient to absorb initial supply.
Reducing the down payment does not require a new cash subsidy or loan scheme. It can operate through existing Housing Authority, bank and HKMC mechanisms. The four measures can also be implemented through existing HOS sales, mortgage-insurance, public housing planning, ballot and annual review mechanisms, with parameters adjusted after each NM HOS sales exercise.
