January 29, 2026 · 《Ming Pao》
Discussions of Hong Kong’s housing problems often quickly descend into emotional confrontation: young people feel they have no future, while the older generation cannot understand why, when ‘we endured the same hardship back then, we could still buy a home.’ When we criticise young people for preferring to ‘queue for public housing’ rather than striving to move up, we obscure a fundamental question: across generations, are people still starting from the same institutional starting line? Earlier this year, the HKU Business School published the Hong Kong Economic Policy Green Paper 2026. The chapter ‘Explaining Housing Affordability and Home Purchase Trends in Hong Kong, 1985-2023’, drawing on nearly 40 years of data, reveals that the city’s public housing welfare system is showing a serious ‘generational fault line’: as time goes on, the share of younger generations receiving public housing welfare continues to fall, whereas the share of older generations who received public housing welfare when they themselves were young is far higher than that of today’s young people.
1. 1985 to 2002: A Ladder of Upward Mobility That Once Existed
After the 1967 riots, then-Governor Murray Maclehose announced the ‘Ten-Year Housing Programme’ in 1972, focused on substantially increasing both the supply and quality of public housing; he further proposed the Home Ownership Scheme (HOS) in 1978, providing a generation with a stable public housing system that allowed for upward mobility and gradual improvement in living conditions. After the handover, the first Chief Executive, Mr Tung Chee-hwa, carried forward this housing-system logic and set out even more ambitious upward-mobility goals.
Research data show that between 1985 and 2002, average annual housing completion reached around 64,800 units, and the overall home-ownership rate climbed from 34% to 54.1% (an increase of about 20 percentage points). Over the same period, the share of public-housing owners rose sharply from 2.9% to 18.7% (up 15.8 percentage points), while the share of private-housing owners rose only modestly (from 31.1% to 35.4%, up 4.3 percentage points).
At the same time, the shares of both private-housing tenants and public-housing tenants fell sharply, by about 10 percentage points. This shows that the housing system of the time offered upward-mobility opportunities: grassroots families would first rent cheap public housing, then purchase an HOS flat, or, through the Tenant Purchase Scheme (TPS) introduced in 1998, buy the public housing flat they were then living in, thereby moving up to become public-housing owners; some would eventually enter the private market to buy private housing. This system helped the baby-boom generation accumulate assets and become the stable middle class of society.
2. 2002 to 2023: Policy Shift and the Ladder Fault Line
After the Asian Financial Crisis, the government repositioned its housing policy in 2002, suspending the Home Ownership Scheme, halting the expansion of the Tenant Purchase Scheme, and cutting land and housing supply — leaving a generation unable to move up. This decision continues to profoundly shape Hong Kong’s development today.
Over the 20 years from 2002 to 2023, average annual housing completion was roughly halved to about 30,900 units; the overall home-ownership rate did not rise but fell, shrinking from 54.1% to 50.1%, a drop of 4 percentage points. Within that, the share of public-housing owners fell by 2.2 percentage points and the share of private-housing owners fell by 1.8 percentage points; conversely, the share of private-housing tenants rose by 3.6 percentage points, while the share of public-housing tenants also edged up by 0.3 percentage points.
The sharp drop in housing supply drove a rapid rise in property prices. In 2000, the price of a 500-square-foot flat in Kowloon was 6.8 times the median household’s annual income, and later peaked at 22.6 times in 2020. Although prices began to pull back after peaking in mid-2021, by 2024 prices were still 16.3 times household annual income — housing affordability had worsened by nearly 140% compared with 2000.
The subsidised-housing market showed a similar trend. In 1995, a 500-square-foot HOS flat in Kowloon cost 4.2 times the median household’s annual income, rising to 11.8 times by 2024 — an increase of about 180%. HOS flats have not only become more expensive but also harder to win. Take White Form applicants for HOS as an example: between 1985 and 2002, the success rate reached 17%, meaning an average family could expect to buy a home after about five or six years of waiting; but by 2002-2023, the success rate had fallen to just 3%, a drop of 14 percentage points, making HOS draws as remote as winning the lottery. When this most important ‘ladder of upward mobility’ in subsidised housing was cut in half, the younger generation was forced into a distorted private market.
The generational difference becomes especially clear when we focus on the 30-39 age group. Between 1993 and 2023, the share of this group receiving public housing subsidies contracted sharply: from 30.1% in 1993 to 16.1% in 2023, a drop of about 14 percentage points. Within that, the share of public-housing tenants fell from 20.9% in 1993 to 9.9% in 2023, a drop of about 11 percentage points; the share of public-housing owners also fell from 9.1% to 6.2%, a drop of about 3 percentage points. Over the same period, their chances of buying private housing also declined markedly, from 30.7% to 23.4%, a drop of about 7 percentage points.
During this period, both access to public housing welfare and opportunities for private home-ownership fell at the same time, so young people were forced to turn to other living arrangements. The share of private-housing tenants rose from 14.1% to 20%, an increase of about 6 percentage points; while the share living with parents climbed sharply from 25.1% to 40.5%, an increase of about 15 percentage points — the largest rise of any category.
In other words, in the 30-39 age range — a life stage when people should be gradually building independent homes and accumulating assets — the two main routes to upward mobility for young people, subsidised-sale housing and private housing, have narrowed simultaneously. As a result, more young adults are staying long-term in private rental housing or living with their parents. The 40-49 age group shows a similar trend, though less pronounced.
These changes are not because young people have suddenly become unwilling to buy homes, but because viable options are disappearing. The public housing system did successfully help the older generation complete their upward mobility, but after the 2002 reorientation of housing policy, it has failed to offer the same opportunities to younger generations.
3. The ‘Public Housing Above All’ Mentality Reflects Deep Systemic Issues
In today’s housing market, even the most basic private home is wholly unaffordable for a median-income family in terms of both rent and price. By contrast, public-housing rents have long been maintained at around 10% of tenant income, making it the only affordable option.
In such an institutional environment, young people suppress their own wages, reduce their working hours, or even switch to part-time work in order to pass the public-housing income test — a forced, rational response to a distorted housing market. It does not reflect unwillingness to strive for their ideals; rather, it shows that the incentive design of the housing system itself is fundamentally pathological.
In sum, the housing predicament Hong Kong faces today is not just an issue of supply or price; it is also one of generational fairness. Past public housing policy successfully improved the older generation’s living conditions, but after the policy turn, it has left the younger generation out in the cold.
4. Building More Public Housing Helps Young People Move Up
The current government’s active expansion of public housing is a very welcome change. Over the next five years, large numbers of public housing units will be completed — an expected total of 169,000 units, including about 580,000 HOS units, which should be sufficient to ease the situation described above. However, weak investor confidence in recent years and shrinking private housing supply will likely keep overall housing in short supply, and young people’s upward mobility may not be resolved quickly. Total housing completions and young people’s upward mobility will need long-term monitoring.
(Translation supported by AI)
