3rd September 2026 – (Hong Kong) For three decades Hong Kong has treated its housing problem as a numbers exercise, and the numbers reveal what that approach has cost. New residential units completed today are on average more than 26 per cent smaller than those built thirty years ago. Public housing has fared worse: the mean flat shrank from 433 square feet in 1995 to 287 square feet in 2024, a decline of 33.7 per cent. This was not an accident of design but a predictable outcome of policy. The Long Term Housing Strategy has long measured success chiefly by the count of completed units, and when supply becomes the sole yardstick, living space is the variable that gets sacrificed. Larger flats disappeared first, then even one- and two-person units were compressed. Living smaller became a structural condition rather than a temporary hardship.
The Northern Metropolis now offers a rare chance to break that pattern. The government projects roughly 500,000 new residential units there, including some 150,000 public units over the next decade. When supply on that scale is credibly promised, the argument for continuing to prioritise quantity over quality weakens considerably. The Federation of Public Housing Estates has proposed raising the minimum usable area of subsidised sale flats in the district from around 280 square feet to at least 350, requiring that larger units make up no less than half the stock, and lifting the per-capita public housing allocation from seven square metres to ten. These are modest corrections, not extravagances, and the fiscal logic that once justified minimal space is itself eroding. The high land-price model that sustained government revenue is becoming untenable as the economy restructures, and Beijing has repeatedly pressed the administration to resolve the housing question. The pressure now points toward doing better, not merely doing more.
The comparison with Singapore is instructive rather than flattering. A city more crowded than Hong Kong delivers new Build-to-Order flats averaging 80 square metres, roughly 861 square feet, with the common four-room family type reaching about 90 square metres, close to 969 square feet. That Singapore manages this while Hong Kong does not is a question of policy choices, not of geography or fate. The same divergence appears in retirement financing, and it bears directly on the second proposal now before the government: allowing residents to draw on Mandatory Provident Fund savings to buy a home. Singapore permits exactly this through the Central Provident Fund, whose Ordinary Account can be used for down payments, mortgage instalments and related fees, subject to valuation limits and a requirement that principal plus accrued interest be refunded on sale. The safeguards against depletion and speculation are built in.
Hong Kong’s MPF is smaller in every dimension, yet no longer trivial. Total assets reached HK$1.55 trillion by the end of 2025, with the average account holding HK$324,000. By the end of 2024, some 125,000 accounts held HK$1 million or more, and a tenth of those belonged to workers under forty. A middle-class couple each earning HK$20,000 to HK$25,000 monthly would, after a decade of contributions and returns, likely hold between HK$400,000 and HK$600,000 combined. With entry-level flats such as two-bedroom units in City One Shatin having corrected to around HK$4 million, that sum could realistically cover a down payment. The obstacle for most young families is not monthly repayment capacity, which stress tests can accommodate, but the upfront deposit that inflation erodes faster than savings can grow.
The government’s longstanding objection is coherent but no longer decisive. Officials argue that early withdrawal leaks money from a system designed to compound over a working life, and that Hong Kong’s mandatory contribution rate of five per cent from each side, well below Singapore’s thirty-plus per cent, leaves too thin a cushion. These are real considerations. They argue for careful design, not refusal. A withdrawal cap, perhaps half the account balance with a preserved minimum, restriction to first-time self-use buyers, and a reallocation mechanism that channels funds directly to the seller and requires repayment with returns upon resale would address the leakage and speculation concerns simultaneously. Property ownership can itself become a retirement asset: a paid-off flat later converted through a reverse mortgage offers a retiree more security than the same sum left as cash and consumed by rent.
What makes the case urgent is demographic. Hong Kong recorded 29,700 births in the year to mid-2026, falling below 30,000 for the first time since records began in 1962, a 15.6 per cent annual decline. Surveys show younger residents’ desire to own homes weakening, with high prices and unmanageable down payments cited as the leading deterrents. Cramped flats and unreachable deposits are not the only reasons couples defer having children, but they are documented ones, and they compound each other. A family cannot raise a child in space that has been engineered down to the statutory minimum, and cannot buy larger space it cannot afford to enter.
The two proposals belong together. Raising minimum flat sizes in the Northern Metropolis addresses the space that families need, while relaxing MPF access addresses the capital they need to reach it. Both can be implemented with safeguards, both draw on precedents that work elsewhere, and both respond to problems the government has already acknowledged. The Financial Secretary has signalled a willingness to review the pension question rather than dismiss it. The coming Budget is the appropriate moment to convert that willingness into a concrete, carefully bounded scheme.
