Let me first thank the Hon TSE Wai-chuen for moving this debate on setting target ratio of housing expenses and standard per capita living area. They address the paradox of housing in Hong Kong nowadays. People are living in expensive but small flats. Actually, we have focused on property prices and land supply when housing problems are debated in this Council in recent years. Living area is rarely mentioned and this Motion is a timely reminder of inadequate attention to quality of living. We should strive for even better living environment for the next generation.
An average middle income family would be contented with owning a flat of just several hundred square feet in floor area. However, such a humble desire would cost them 14.7 years of income on average. In fact, if a family buys a flat at this juncture, debt service would take up 56 per cent of monthly income, leaving only 44 per cent to maintain living. It is not surprising that every penny counts.
Not only housing price is high, rental is not cheap. According to official figures, housing accounts for 37 per cent of household spending. In comparison, the same item in developed countries, like Singapore, Japan, UK and Germany etc, only accounts for less than 30 per cent. For America and Germany, the ratio is even less than 20 per cent. Frankly, Hong Kong workers do not earn more but spend relatively more in housing. As accommodation is basic expense, the burden is heavy. It is not surprising that many polls have found that Hong Kong people are unhappy.
This Motion asks the Government to set a target of reducing the ratio of housing expense to household income to below 30 per cent in five years and further to below 25 per cent within 15 years with the view of easing burden on citizens. These goals are indeed challenging, if not missions impossible in prevailing circumstances. That said this Motion brings in new thinking for the community to consider housing problem from new dimensions. It also brings in new parameters for housing problem evaluation. They are guiding principles in the pursuit of long term solutions.
Frankly, we have to face the reality that Hong Kong needs many more smaller units in short term to meet aspiration of first time home-buyers. Increasing housing supply is also pressing so that price and rental would come down to more affordable levels. Thus, we are looking to Development Bureau for more land for housing development.
The Consultation Paper on Long Term Housing Strategy released earlier targets at new supply of 470,000 residential units in the next 10 years with a ratio of 60:40 for public and private housing. Some people do not think they are sufficient to meet demand but others doubt availability of land to meet such ambitious building target. In my view, the Government should first find more sites for development irrespective of building target and built up land reserves. Land use planning might then be followed. Land demand in Hong Kong would remain strong for economic development and livelihood. To source new sites is the top priority.
Hong Kong has developed only 24 per cent of land for buildings and infrastructure and thus there are still substantial areas available for new development. However, the Government is having problems in site sourcing, like conservation, resettlement and compensation. New development plans are disrupted. Frankly, these are complex issues. Thus, it might be more practical to consider alternatives to land resumption and avoid controversies. For instance, reclamation and caves are other means of land sourcing with fewer disputes.
All along, I have been supportive of reclamation outside Victoria Harbor because it might provide more land at less cost for comprehensive planning and larger development. Moreover, any dispute would be less and easier to resolve. Actually, many coastal countries or cities choose to reclaim land to meet economic and population growth. For instance, Singapore has reclaimed land of 13,000 hectare, or 26 per cent of its total area. In Hong Kong, reclaimed land amounts to 6,800 hectare, or just 6 per cent of total area. The last Policy Address has proposed to reclaim artificial islands between Hong Kong Island and Lantao. It deserves further studies in depth.
Lastly, as mentioned earlier, the Government is facing opposition in the search for sites, causing undue disruptions to new development. May I remind opponents that: if we do not have feasible alternatives to Government proposals we would not have sufficient land stock to support economic growth and to meet the demand of first time homeowners. We would then probably end up with inertia.
With this observation, I conclude my remark.