Buying a property in Hong Kong is an exciting yet a very expensive experience. This is why you need to be very careful about how you will go about it. One of the decisions that you have to make is what type of property you will buy.

The price that you have to pay for a property in Hong Kong depends on various factors. The location will certainly come into play. With more than seven million people squeezing in a 427-sqm land, it can become quite pricey. Not only that, your income will determine how much you can afford to borrow – thus setting the price range of the house you can buy.

An important consideration when you are buying a house in Hong Kong is the type of property you will buy. In this region, you have two options: public housing and private housing.

According to the website, housing demand in Hong Kong is quite great. The government targets to supply 480,000 units between 2015 and 2025. This is split to 290,000 for public housing and 190,000 for private housing.

Although there are many units available, you need to make a smart decision about what type of property you will buy.

Public Or Private Housing In Hong Kong: What Type Of Property Should You Buy?

About the public and private housing in Hong Kong

Let us discuss the two types of housing that you can avail in Hong Kong:

Public housing

This is the type of housing that most Hongkongers want to buy. Most of the public housing units are rented by the government at very low prices. However, some units are constructed for the purpose of selling. These are sold under various programmes and payment schemes. The price is significantly lower than what you would pay if you bought a private unit.

Of course, the low price has a catch. Not everyone may be qualified to purchase a unit from the public housing scheme. Although around half of the Hong Kong population live in rented public houses, not everyone is eligible to buy a unit.

There are four different ways you can purchase a unit.

  • Home Ownership Scheme (HOS). This is available for those who are currently renting through the Public Rental Housing (PRH) scheme and have a low-income. It allows qualified buyers to purchase new units that are constructed specifically for selling.
  • Tenants Purchase Scheme (TPS). This is also an option for those living through the PRH. In case the tenant wants to purchase the unit they are currently living in, this is the scheme that they need to look into.
  • Flat-for-Sale Scheme. This is the same as the HOS but is managed by the Hong Kong Housing Society. The prices are low and can be bought through the HKHS or the Home Ownership Centre. The elderly are given priority in this scheme.
  • Sandwich Class Housing Scheme. This is for those who are not eligible for the public housing scheme and cannot afford a private unit.


According to the Housing Authority, as of March 2015, there were 395,600 subsidised flats available under the HOS. Take note that these units cannot be resold in the open market within a specific time frame because you will be penalised for it.


While it does seem like there are many flats to be sold, you need to know that there is a long waiting list. In fact, it will take at least three years before you can live in your unit.


Private housing

The other type of property that you can buy in Hong Kong is the private housing. South China Morning Post reported that the supply of private houses rose to 15,700 units by the end of 2014. Another 74,000 new flats are expected to be constructed by 2018 to 2019. This means that there is a sustainable supply of flats despite the growing concerns about the housing market.

Even though these units are more expensive, people opt to invest in them because they like the convenience and the luxury the flats bring. However, the demand for private houses is not greater than that of the public housing market. Obviously, the price plays an important role.

The Legislative Council Secretariat states that private housing units are classified into five classes: A to E. Those under the small/medium-sized flats fall under Class A (40 sqm and below); Class B (40-69.9 sqm); Class C (70-99.9 sqm). Class D consists of large-sized flats (100-159.9 sqm) while Class E is from 160 sqm onwards.

Based on the Secretariat’s data, small and medium-sized flats are starting to decline, but there are projects by private developers that can increase the number of units. The vacancy rate is higher for large-sized flats – which is not surprising since the cost may be too high for the average Hongkonger to purchase.

Those who can afford private housing are usually in the middle-income to high-income classes. According to the Hong Kong government’s housing data, the private sector plays an important role because it allows many Hongkongers to buy a house when they are unable to purchase from the public housing schemes. Of course, the government has to place strict regulations and licenses to keep the property prices in check.

Factors to consider when choosing the type of property in Hong Kong

It seems like the obvious option is to buy a public housing. In fact, according to the Hong Kong Free Press, a lot of people have opted to live in public units because of the unaffordable prices in the private housing market.

Before you can decide which of the two you will buy, there are three important factors to consider:


When you think of price, it is obvious that public housing will win. For instance, under the HOS, you can buy a 37 sqm by 46 sqm flat for HK$1.5 million to HK$ 2 million. The actual price will depend on the size of the unit and your mortgage payment abilities. When it comes to private housing, Global Property Guide reveals that a flat that is less than 40 sqm can cost you between HK$3.7 million and HK$ 5.1 million.


If you are in a hurry to buy a house, you might have a hard time with public housing. There were 137,900 applications to purchase public flats as of March 2015. This means that there is a waiting time of 3.3 years for an average applicant. When it comes to private housing, however, there are units readily available. Since the number of buyers is not as much as those purchasing public houses, it would be faster to become a homeowner through the private housing.


Apparently, this is the deal breaker. Regardless of whether you can afford to wait for a public housing flat to be available or not, if you do not qualify, you will not be able to buy one.

Your income would be a great factor when it comes to your public housing eligibility. If you cannot meet this qualification, your homeownership option would only be through the private housing. Of course, this is not that bad. If you can afford it, why not? If you decide to sell, you can gain a bigger profit on the transaction.


Read this article to know more about public housing in Singapore.

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