Home Ownership: Guide to Buying Public Domestic Housing In Hong Kong
Public housing in Hong Kong is a popular choice for many residents. It is not a secret that the real estate market in this region is one of the most expensive the world. Even if you have a stable job and a great compensation, the cost of private housing is too great for the average resident.
Many do not have many housing choices because they may not have high-paying jobs. With the rising cost of living and the dwindling liveable space in Hong Kong, the government had to take steps to keep squatters from exploding within the city.
Not only are they an eyesore, but there are those who take advantage of these poor people who are getting desperate to find a place to live in.
The high demand for decent living space is the reason why people are clamouring to have a part of the public housing program in Hong Kong.
According to the data from CityLab.com, 30% of the Hong Kong population live in public rental housing. Some of them are hoping to get approval so they can buy one of these homes. They can fulfil their home ownership dreams through this way despite their limited income.
The Hong Kong Housing Authority or the HKHA oversees all of these developments and according to them, they have plans to build 76,000 units by 2020. While this may seem impressive, the waiting list for public housing is much more than what the government can build.
4 ways you can buy public housing in Hong Kong
With the tight competition and strict qualifications to buy these public dwelling places in Hong Kong, you need to educate yourself about your housing options.
You want to have the knowledge that will enable you to make the right choices about the home buying process you will not waste time applying for something you are not qualified for. The time wasted will end up putting you further down the waiting list.
 Here are the 4 ways that you can buy a public domestic property in Hong Kong:
Through the Home Ownership Scheme (HOS)
This is probably the most common option that you have. You can purchase subsidised public housing estates through this scheme. You need to prove that you are a resident of Hong Kong that is currently availing of the Public Rental Housing (PRH) scheme.
Not only that, you have to prove that you are earning a low-income. This is usually easy because you cannot get into PRH unless you have a low-income. Take note that HKHA managed these properties and are not the same as the ones being offered by the PRH scheme. These are built so it can be sold to PRH tenants – as long as they qualify.
Through the Tenants Purchase Scheme (TPS)
This is an option for qualified tenants living in public housing under the PRH. Should they wish, they can send an application or Letter of Offer to buy the unit they are currently renting as long as it is not within the housing intended for small households or senior citizens.
You cannot buy units that are used for purposes of social welfare and those that have shared facilities like a common toilet, entrance, and kitchen. The prices of such units are lower than those offered in the Home Ownership Scheme.
Through the Flat-for-Sale Scheme
This is the same as the HOS and TPS but the Hong Kong Housing Society (HKHS) manages it. The prices of these offered flats are low too. Â The Housing Society and the Home Ownership Centre sell these houses.
Specifically, HKHS developed these estates with facilities for the elderly – so you can assume that elderly applicants are likely to receive priority for these units.
Through the Sandwich Class Housing Scheme
There are residents in Hong Kong who want to buy a house under the public housing category but they are not necessarily eligible because of how much they earn. This is why the government invited the HKHS to come up with a scheme that will help lower-middle and middle-income earners to afford a house.
These people are also called the sandwich class – thus the scheme reference. The price is considerably higher than the HOS but it is still lower than the private housing options. While the construction of these estates stopped in 2000, there are still units that you can avail should you wish to buy through this option.
Financial tips to help you own a house in Hong Kong
Without a doubt, it is difficult to buy a house in Hong Kong. However, public housing makes this a reality even for financially challenged people. Of course, that does not make the application any easier.
According to the article published in the South China Morning Post, the waiting list into these public dwelling units takes more than three years. That is how great the demand is. No matter how great the effort is to build more units, the supply just cannot meet the demand for decent residential units.
Since you are most certainly going to wait for a couple of years,
Here are some tips that will allow you to be financially ready to invest in a property in Hong Kong:
- Set home buying as an important financial goal. First and foremost, make it a financial goal. Unless you officially recognise it as a goal, you will not make the effort to save up for this huge investment.
- Create a budget. After goal-setting comes budgeting. It is hard to reach a goal without a plan. You want to specifically put a saving category for your home buying goals so you will be obliged to put aside money from your paycheck. Otherwise, you might end up spending it for something else.
- Live with your parents for as long as you can. This is a common practice in Hong Kong anyway. Staying with your parents will allow you to save on living expenses as you share the same housing costs with them. Anything that you save can be put aside for your home deposit.
- Learn to cook your own meals. This is one of the most important expenses that you will make – and it is also one that we can easily regulate. Eating out is becoming expensive in Hong Kong – especially now that cheap food shops are starting to close because of the high rental rates. More expensive restaurants have replaced many affordable eateries. If you want to enjoy good and healthy food, you might as well learn how to cook them from scratch. It will save you a lot of money in the long run.
- Earn more money. This is an obvious answer that will help you home buying aspirations. If you can get a side job or if you have the option to work longer hours – you have to grab the opportunity. You should not spend your increased income on a more expensive lifestyle. It should be used as your home buying fund instead.
- Improve your credit score. Finally, you have to work on your credit score. If you have to borrow money to pay off your home – even if it is in public housing, a good credit score is your ticket to get a low-interest rate. It signifies that you are a low-risk borrower and lenders will not charge you a high-interest rate for that.
