A cognitive mapping exercise to study a news article on "the housing affordability challenge facing the HK young people": a note
The news article to examine
Quote:
In a recent report
titled “Study on the Housing Affordability of University Graduates across
Generations in Hong Kong,” released by the New Youth Forum on 7th October,
concerning data highlights the significant increase in Hong Kong’s overall
property price index over the past 35 years. Comparing the years 1987 and 2022,
the index has skyrocketed by 1305.7%, far surpassing the inflation rate of
221.8%. On the other hand, rental prices have experienced a relatively modest
increase of 279.4%.
The study further
reveals that the median income for the most recent generation of university
graduates (aged 20 to 24) stands at HK$17,424, showing a slight improvement
from HK$15,856 in 2017. However, when adjusted for the property price index,
the median income for the eighth generation of university graduates in 2022
amounts to HK$4,868, indicating a significant decline compared to the seventh
generation’s HK$4,492 in 2017. The purchasing power of today’s youth to enter
the property market falls far behind that of the first generation in 1987,
whose median income was HK$17,490. The New Youth Forum warns that Hong Kong’s
property market is currently at an exceptionally high level, making it
challenging to alleviate the burden on young generations, emphasizing the
urgent need to increase subsidized housing supply.
Analysing data
from the Hong Kong Government’s Census and Statistics Department, the New Youth
Forum compared university-educated individuals from different generations,
dividing each five-year period from 1987 to 2022 into distinct cohorts. The
first generation consists of individuals born between 1963 and 1967, currently
aged between 55 and 59, while the most recent eighth generation comprises those
born between 1998 and 2002, now approximately 20 to 24 years old.
The study further
dissects the property price index into different unit categories based on floor
area. In the past decade, the most significant price increases were observed in
smaller units known as “starter homes.” From 2012 to 2022, the price index for
Category A units (with a usable area of less than 40 square meters) rose by
87.3%, surpassing the 82.6% increase for Category B units (with a usable area
ranging from 40 to 69.9 square meters) and the overall property price index
increase of 79.3%. This disparity exacerbates the challenges faced by younger
generations with weaker purchasing power, making it even more difficult for
them to enter the property market. Additionally, in terms of rental prices,
Category A units experienced the highest increase of 30.8% among all unit
types.
As individuals
gain more experience and their income grows from the initial stage of
employment (between the ages of 20 and 24) to ages 25 to 29, the proportion of
income spent on housing should ideally decrease. However, the study found
significant variations in the ratio of housing prices to income due to
different degrees of market fluctuations across generations. The ratio for the
first generation increased from 19.1% in 1987 to 25.5% in 1992, indicating that
salary increases have not kept pace with property price increases. Following a
decline in property prices during the 1998 Asian financial crisis, the ratio
for the third generation improved significantly, dropping from 42.4% in 1997 to
14.2% in 2002.
In recent years,
the sixth generation already faced a high proportion of income spent on housing
at 52.5% in 2012. By the time they reached ages 25 to 29 (in 2017), this ratio
further rose to 56.5%, reflecting the increasingly burdensome cost of
homeownership. Although the situation has slightly improved for the seventh
generation, with the housing price-to-income ratio decreasing from 75.3% in
2017 to 55.5% in 2022, the burden of homeownership remains substantial.
The findings of
the study shed light on the growing challenges faced by Hong Kong’s youth in
affording housing, as property prices continue to surge while their purchasing
power lags behind. Addressing this issue requires urgent measures to increase
the supply of subsidised housing in order to alleviate the burden on the
younger generation and ensure a more balanced and sustainable housing market in
Hong Kong.
End quote
(Source” Dimsumdaily
Hong Kong 7:46PM Sat October 7, 2023: https://www.dimsumdaily.hk/hong-kongs-property-prices-soar-1305-in-35-years-as-university-graduates-homeownership-ability-declines/)
A cognitive map constructed by me to capture
the housing issue of “the housing affordability challenge facing
the young generation in Hong Kong”
Items on the cognitive map:
Category A. The environmental drivers
Item 1. High rate of increase in housing price over the last 35 years, especially on "starter homes"
Item 2. Modest rate of increase in rental prices (yet higher rate of increase for smaller unit]
Item 3. Decline of income level of the recent university graduates, as compared with that of the older generation.
Category B. The topic under review: the housing affordability challenge facing the young people in Hong Kong"
Item 4: Increased burden of living of the young generation due to heavy housing spending.
Item 5: More severe housing affordability challenge facing the young people of Hong Kong
Category C. Housing solution-concern
Item 6: Increase pressure to provide subsidized housing for the people of Hong Kong
