HOUSING CONSUMPTION OF ASSISTED HOME OWNERSHIP

The Hong Kong government has significantly adopted a "bricks and mortar" approach to addressing both housing shortages and home ownership. Due to downpayment constraint, many middle-low income households have not systematically availed themselves of opportunities to buy homes, despite the fact that they have relatively high incomes, and could have afforded it to a greater extent than it occurred. The government has, since 1978, developed its low cost home ownership initiatives - the Home Ownership Scheme (HOS). This has, on one hand, encouraged the large-scale transfer through transfer from the public rented sector to home ownership. On the other, it has assisted people at the margins into home ownership. This paper first reviews the HOS and home ownership in Hong Kong and the international context. We analyse factors that affect housing consumption of HOS, highlighting the effects of household background characteristics. Our results indicate that housing consumption by HOS buyers is quite sensitive to income class. We also find that household size yields demand and substitution effects on housing consumption. However, the difference in housing consumption level between the HOS buyers from the public and private housing sectors is insignificance.