The Public and Social Policy Research Centre (PSPRC) has constructed a Home Ownership Scheme (HOS) Price Index to provide an indicative reference for the price trends of Home Ownership Scheme flats on the secondary market. The initiative aims to make up for the lack of a price index dedicated to subsidised housing in the context of the Government’s recent adjustment of the public/private split of housing supply from 60:40 to 70:30.
The research team was led by Prof. Charles Kwong, Dean of the School of Arts and Social Sciences-cum-PSPRC Director. The HOS Price Index is the ratio of the total market value of the constituent estates in the current month to that in the base month, where the constituent estates are the 50 HOS estates with the highest transaction volume in the past 15 years, while their market prices are calculated based on the hedonic pricing model.
The research team selected January 2013 as the base period and compared the trends of the HOS Price Index and the Centa-City Index (CCI) reflecting secondary private home prices. The results demonstrated that while prices in both the private and subsidised markets increased, the HOS secondary market exhibited a much sharper price hike. In cumulative terms, from January 2013 to June 2021, the HOS Price Index escalated by 107.9%, whereas the CCI rose by 55.9%. The study also revealed an increase in interest rate sensitivity in the HOS secondary market similar to the private market. Prof. Kwong says the research team will update the HOS Price Index on a monthly basis. He hopes that the index will provide an objective indicator to help the Government as well as members of the public make better informed decisions on housing matters.
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