Ontology, policy and the market: Trends to home-ownership in Hong Kong

An important trend in housing delivery internationally has been rising rates of home-ownership. In Hong Kong, owner-occupation has expanded rapidly over the past two decades, and this is expected to continue. This paper seeks to account for trends to homeownership in Hong Kong. It is proposed that two principal factors account for rates of home-ownership internationally: the interaction and combined outcome of housing affordability and household preferences-the 'market explanation' for tenure choice; and the 'ontological explanation' of home-ownership as a preferred household tenure choice, which assumes that ownership is the innately preferred tenure form. On face value, Hong Kong presents a relatively persuasive case for the ontological explanation for trends to home-ownership. Yet the findings of this paper suggest that the decision to buy appears to be systematically explicable by market factors: in the private sector, primarily by investment considerations, namely high returns to residential property investment and favourable user cost of housing capital; and, in the public sector, by a very fine-grained approach to household affordability with publicly assisted homeownership initiatives. Hong Kong demonstrates again how carefully families weigh the bundle of services associated with their tenure options. The government plans to expand home-ownership further, yet there are major systemic implications for such an expansion.