Letters | How Hong Kong can measure poverty more effectively

Readers propose a framework the government can use to assess poverty, and point out a barrier to those who want to buy second-hand homes

Hong Kong society

Letters

Published: 11:30am, 29 Mar 2024

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The Hong Kong government is reviewing the official measurement of poverty. The poverty line has been set at half of the median domestic household income before policy intervention. Given the limitations of using income as the only indicator of poverty, the government aims to measure poverty through a multidimensional approach to enable targeted poverty alleviation. The question is how multidimensional poverty should be measured in the local context.

A study I conducted together with professors at Polytechnic University and at NYU Shanghai proposed a comprehensive poverty measurement. The study was published in the Journal of Asian Public Policy in June last year.

We combined three different concepts of poverty – income, deprivation and social exclusion – within a multidimensional framework. The comprehensive poverty measurement forms a more complete picture of poverty. Income reflects economic sufficiency; deprivation focuses on socially perceived necessities and considers the real situation of a poverty-stricken life; and social exclusion deals with social barriers to participation in socioeconomic activities.

Using data from a citywide representative survey, the study applied the innovative multidimensional measurement of poverty in Hong Kong’s context. Our results showed that, according to the comprehensive poverty measurement, Hong Kong’s poverty rate was 6.1 per cent.

Individuals who were immigrants, aged 65 or over, had low levels of education and poor health, and received social assistance were more likely to be comprehensively poor. More importantly, public rental housing is an effective policy in alleviating poverty across various dimensions.

Liu Mengyu, postdoctoral fellow, Department of Applied Social Sciences, Hong Kong Polytechnic University

Rethink basis of mortgage term calculations

Before the recent axing of the stamp duties introduced about a decade ago, owning a flat had become the holy grail for many ordinary families. Home prices are not expected to rebound this year, despite the removal of property-cooling measures.

However, I am surprised that there hasn’t been much mobility among homebuyers, including myself. Expectations of a full-blown boom in property transactions should also take into consideration the ageing second-hand properties in Hong Kong.

The Urban Renewal Authority is tasked with creating a quality, vibrant living environment in Hong Kong. We have seen some relatively old areas such as Kwun Tong and Sham Shui Po undergoing revitalisation over the years. However, revitalisation seems to lag behind the ageing of the city’s buildings. We have a large number of second-hand flats in buildings aged over 50 years.

Take a 50-year-old flat as an example: if a homebuyer applies for an 80-90 per cent mortgage, most banks deduct the age of building from 75 to calculate the repayment period. A 50-year-old property can only be mortgaged for a maximum of 25 years. This implies that the older the property, the shorter the repayment term.

I strongly suggest the government advise all local banks to abandon the number 75 as the basis for mortgage calculations because it simply constrains the choice of homebuyers interested in second-hand flats.

Gilbert Pang, Sai Ying Pun

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