October 2, 2025 · 《Ming Pao》
This year’s Policy Address marks a major shift in housing policy: whereas the government has long focused on tackling sub-divided flats and boosting public rental housing supply, this year the main thrust has changed to helping citizens become homeowners and move up the housing ladder. The authors have noted in previous articles on this page that subsidised-sale flats are in short supply, breaking the upward ladder; large numbers of sandwich-class citizens cannot afford to buy and have resorted to “lying flat” while waiting for public rental housing. Endlessly building more public rental housing will not solve the core housing problem nor shorten public rental waiting times; instead, the upward ladder must be rebuilt.
The authors fully support the current government’s commitment to addressing the housing ladder problem and helping citizens become homeowners. The Policy Address proposes six measures to enrich the homeownership ladder. How much substantive benefit will these reforms bring to the public? This article examines each new policy’s specific impact on upward mobility and estimates how many people may benefit. Overall, while the policy direction is correct, the reform effort remains insufficient.
1. Increase Subsidised Housing Supply and Adjust the Green/White Form Ratio
The first measure proposed by the Chief Executive is: “Building on the significant increase in Home Ownership Scheme (HOS) supply, we will adjust the Green Form/White Form quota ratio from 40:60 to 50:50, helping more public rental tenants become owners while allowing existing public rental flats to be recycled to applicants on the waiting list — a win-win outcome.”
If HOS supply remained unchanged, raising the Green/White Form quota ratio would be a zero-sum game: a higher Green Form success rate would mean a lower White Form success rate. Even so, raising the Green Form ratio aligns with the broader direction of tightening policies on better-off public rental tenants and encouraging the turnover of public rental flats occupied by well-off tenants to those on the waiting list. Even if the White Form success rate falls as a result, the move is still commendable.
In practice, HOS supply will rise sharply, which is the biggest highlight of rebuilding the housing ladder. Secretary for Housing Winnie Ho has stated: over the next five years, HOS supply will increase from the previous 39,000 units to 58,000 units — a roughly 50% increase — and the White Form success rate will rise by about 25%.
The impact of increased HOS supply and a changed Green/White Form ratio on success rates can be illustrated simply. Take 100 HOS units as a base: previously, 100 HOS units allocated 40 to the Green Form and 60 to the White Form. In future there will be 150 HOS units (a 50% increase), with 75 each allocated to the Green and White Forms. White Form units will rise from 60 to 75, a 25% increase. If other conditions remain unchanged, the White Form success rate will also rise by 25% (this is the figure Secretary Ho announced, although she did not explain how it was calculated). Green Form units will rise from 40 to 75, an increase of nearly 88%. However, after the tightening of better-off tenant policies, the number of Green Form applicants will increase significantly, so the Green Form success rate increase will be less than 88%. In any case, the push from tightening better-off tenant policies and the pull from an 88% increase in Green Form allocations will create a double effect, and the incentive for better-off public rental tenants to move up to HOS will undoubtedly be significantly strengthened.
The authors have previously noted on this page that HOS flats are in even shorter supply than public rental housing; increasing HOS supply is the key to public housing reform. Last year’s Policy Address already announced that the ratio of public rental housing to subsidised-sale flats would be gradually adjusted from 7:3 to 6:4, and we recommend that this ratio be further adjusted to 5:5 as soon as possible.
2. Expanding Unit Sizes to Aid Upward Mobility Is a Welcome Change
The second measure is to increase the proportion of larger flats in HOS and Green Form Subsidised Housing, to attract more public rental families to consider home ownership. According to the Housing Authority’s 2022 survey of HOS applicants, about 52% of Green Form applicants cited improving their living environment as the main reason for home purchase, while 29% said their current living space was insufficient. Clearly, unit size is one of the key factors affecting public rental tenants’ willingness to buy.
In the past, subsidised-sale flats have gradually been “nano-sized” — the share of small HOS units has continued to rise, with units under 430 square feet (saleable area) growing from 21.5% in 2017 to 24.3% in 2024. This has been unable to effectively address public rental households’ real demand for “better living environments” and “more living space.” For families currently enjoying relatively large public rental flats, there is almost no incentive to move to smaller but more expensive HOS units.
Hence, providing more medium and large units can enhance HOS’s appeal, encourage public rental families to move up, thereby freeing up more public rental flats for those on the waiting list and easing both waiting-list pressure and the sub-divided flat problem.
3. White Form Quota for Resale HOS Rises, but the Increase Is Modest
The third measure is to add 1,000 quotas to the White Form Secondary Market Scheme (White Form SMS), and to issue additional approval letters as appropriate. These measures do help improve White Form applicants’ home-purchase success rate. For example, in “White Form SMS 2024,” with 34,000 applicants, the success rate will rise from about 18% to about 21%.
At the same time, because only about 80% of successful applicants have ultimately completed a purchase, some quotas have gone unused. If the government issues 20% more approval letters, this is equivalent to releasing another 1,400 places, benefiting an additional 1,120 families. This is estimated to raise the “White Form SMS 2024” success rate further from 21% to about 25%.
However, the more fundamental question is: why must White Form home purchases still rely on “quotas”? As of the first quarter of this year, the Housing Authority and Housing Society had about 342,000 HOS flats that had passed the alienation restriction period and could be sold on the open market after paying the premium, but only about 20% have had the premium paid, leaving more than 270,000 units circulating only in the secondary market. Yet the secondary market is extremely inactive: in the past 10 years, total Housing Authority HOS and Green Form Subsidised Housing transactions numbered only about 21,000.
If the government removes the White Form quota restriction and allows White Form applicants free access to the secondary market, those 270,000 units can become potential housing supply, helping promote subsidised housing turnover and enabling subsidised-sale flat owners to move up — thereby rebuilding the housing ladder.
4. Easing Resale Restriction Periods Has No Near-term Impact
The fourth measure is to ease resale restrictions in order to promote market liquidity. For subsidised-sale flats launched between 2022 and 2024, the resale restriction period on the open market was extended from 10 to 15 years. Under this year’s Policy Address, the restriction on newly launched flats will be reduced back to 10 years.
However, the actual impact of this easing is limited. Currently, only a very small number of units enter the open market after paying the premium. Furthermore, new units will not be eligible to circulate on the open market for 10 years. As a result, this policy adjustment has no near-term impact.
5. Restrictions on the ‘Elderly Owners’ Trade-Up’ Scheme Are Too Tight
The fifth measure is the launch of an “Elderly Owners’ Trade-Up Scheme,” allowing subsidised-housing owners aged 60 or above to swap their larger flats for smaller or more remote ones, unlocking some assets for retirement while releasing urban or larger units to families in need. However, the scheme’s expected effectiveness is unlikely to be ideal. The Housing Society’s earlier “Elderly Owners’ Trade-Up Pilot Scheme” estimated about 1,300 eligible households. Yet over the six years since launch, as of 31 August this year, only 29 applications had been received in total, of which just two had successfully purchased a new flat. According to related reports, about 100,000 households in Hong Kong are currently eligible for the scheme. Assuming a 1.5% success rate, even if the scheme continues for 6 more years, only about 25 owners per year would benefit — a very limited effect.
Although this scheme is slightly more flexible than the pilot — in addition to “big-to-small,” it also allows “urban-to-remote” — the fundamental problem is that its scope is too narrow. For most elderly owners, unless they face pressing financial needs, it is hard to persuade them to actively trade up. By contrast, other families have stronger motivations: not only financial considerations but also children’s schooling, workplace locations, and changes in family size. To truly promote housing turnover, restrictions must be further reduced so that more families can benefit. The authors suggest the government first observe this year’s results; if numbers remain low, it should consider expanding the scheme or even removing the age limit, allowing all subsidised-housing owners to “trade up” according to their personal or family needs, in order to truly release more resources and rebuild the “upward ladder.”
6. The Unpaid-Premium Rental Pilot Helps Owners Move Up
Finally, the sixth measure is to allow subsidised-sale flat owners who have held their units for 10 years to rent out their units to White Form applicants, with 3,000 places. This scheme substantially expands the pool of eligible tenants for unpaid-premium units. Previously, the Housing Society’s “Unpaid-Premium Subsidised-Sale Flats Rental Scheme” was limited to ordinary public rental applicants who had waited 3 years or more, or quota-based applicants who had waited 6 years or more. In 2021, the government estimated that about 90,000 ordinary applicants had waited 3 years or more for public rental housing. According to the General Household Survey, in 2023 about 275,000 households lived in private housing and met White Form eligibility. The policy’s coverage is estimated to roughly triple, which is expected to address White Form applicants’ accommodation needs while waiting for HOS and is likely to have a marked effect on easing White Form tenants’ rental pressure.
As of August this year, the residential rental index has climbed to 198.7 and is expected to soon break the historical high of 200.1 in August 2019. Compared with 2021 Housing Authority data, the median rent of units rented out under the scheme was only HK$8,000, while private flats of comparable size rented for HK$15,000 — scheme rents were only 53% of the private market. The authors’ previous academic research has shown that large numbers of vacant or illiquid Tenants Purchase Scheme units have caused housing resources to lie idle and the number of sub-divided flat households to grow sharply. Effectively revitalising the subsidised housing rental market could help ease the sub-divided flat crisis.
However, complex administrative procedures may also make the scheme unpopular. As of end-August this year, the Housing Society’s “Rental Scheme” had signed only about 590 tenancy agreements in 8 years. Current procedures require owners and tenants to apply separately to the Housing Authority or Housing Society, take statutory declarations and sign declaration forms; after approval and issuance of a certificate, tenants may then search for units through designated platforms or estate agents, negotiate and sign a tenancy, and finally submit a tenancy notice within two weeks.
The whole process involves layer after layer of checkpoints, with the application stage alone potentially taking several months. Excessive administrative burden has become the main obstacle to market circulation. To improve effectiveness, the authors recommend the government streamline procedures and reduce administrative barriers as much as possible.
7. Deeper Reform Still Needed Next Year to Rebuild the Housing Ladder
Overall, this year’s Policy Address is on the right track in rebuilding the housing ladder, but the effort still falls short. To truly break the impasse, HOS supply must be further increased significantly, the “White Form SMS” quota removed, HOS trade-up eligibility expanded, and rental restrictions relaxed. The “combination punch” of reforms still needs to be deepened to allow housing resources to flow effectively and rebuild the housing ladder.
(Translation supported by AI)
