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Building more affordable homes can help more to own homes, period.

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Building more affordable homes can help more to own homes, period.

Someone asked me this question maybe last year. “If more affordable homes are built, would it force prices to fall?” Briefly, NO. First question, would owners of current units sell their units as lower prices just because there are more affordable units being built? I give you the conversation below between a potential buyer and the owner of the unit which the potential buyer wants to buy and the owner is NOT in financial distress.

Potential buyer: Hey Mr. Owner, there are 500,000 affordable units coming in the next 5 years. When all these units come, it will definitely force prices to fall. You better sell me your unit at a lower price today.

Mr. Owner: Wow, 500,000 affordable units coming. That’s great news for you. Happy buying one of the 500,000 units at the price you like yeah. Thanks for viewing my unit.

Affordable homes do not push property prices down

Be realistic yeah. Just because there are today many affordable smartphones has very little to do with pushing down prices of iPhones or the latest phones from the more popular brands. They may also launch some cheaper brands or cheaper phones but their flagship phones or the more premium ones will still be priced at a premium. This is why building more and more units simply meant that more people get to own a unit. It is not to push down property prices because it does not happen.

This is going to be the same even in places where the property prices are already beyond the reach of most working professionals.

Article in Hong Kong chief executive Carrie Lam announced that the government will identify more land plots in the north to provide as many as 186,000 additional homes, taking the total to 926,000 including existing properties and those already planned. She said this about the new metropolis: “is the most vibrant area where urban development and major population growth of Hong Kong in the next 20 years will take place.”

Patrick Wong, a property analyst with Bloomberg Intelligence says that all these plans are not going to make a dent in the city’s home prices for now. He said, “It isn’t something that can happen instantly.” He predicted that Hong Kong’s home values will rise between five per cent and 10 per cent this year. Please do read the full article with more details here: Article in

What’s the average home price in Hong Kong?

The average home price in Hong Kong is US$1.25 million (RM5.2 million). Info Source here:

Median income is HK$18,400 (RM9,875) Info source here:

It means that if a Hong Kong working adult does not spend a single cent from their pay, it would take them 527 months to pay for a home at the average price. This is a total of 44 years. If a couple buys a unit together, that’s 22 years of not spending a single cent if they like to afford a unit. Fortunately, they can get property loans from banks yeah.

Now that we are clear about the actual situation, do we think the home prices will drop because the Hong Kong government intends to build a lot of new affordable units for the people? Feel free to have your own opinion yeah.

Without sudden circumstances, home prices for these current units will continue to hold its own or perhaps slowed down when affordable units start to come online. I would wish that all the Hong Kongers in need of a home should be able to afford a home.

Stop thinking about property price dropping. Start scouting for an affordable property instead.

We can choose to buy further if we like to have lower prices. If it’s within what we could afford, it’s within affordable homes. Just need to get used to travelling a little longer versus staying in the city centre. We can choose to buy in less popular neighbourhoods. If we prefer mature and popular neighbourhoods, then do not complain about higher premiums. We can also choose to follow the auction news of secondary properties too. Remember, that affordable property today will also increase in price even if it’s just following the typical inflation every year.

Can we wait instead? Answer is also a YES as well.

As long as our earnings continue to be faster than the home price increase, we can wait as long as we want. In fact if we become super-wealthy, we actually do not even need to buy a home. Just rent, stay and move once you found a place you love more than the current place. Super-wealthy people do have more choices than a typical working professional yeah. So, whether waiting or not waiting does not depend on the market. It depends on us and us alone based on our earnings capability.

So, truth is, affordable homes is not the same for everyone. In fact it’s very different. Happy evaluating and understanding.

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Next suggested article: Property News Malaysia, since 2013. Enjoy reading yeah

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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