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Young homebuyers in Hong Kong, the UK, and Taiwan need help from family

Housing as an Intergenerational Project



With property prices soaring across the globe, the possibilities for young people to move out of the family home, and form a household of their own, are increasingly dependent on the generosity of the parents they’re leaving behind.


In the course of the three presentations that made up this latest webinar from Lingnan University’s Institute of Policy Studies, four international experts set out the findings from their research into differing aspects of Housing as an Intergenerational Project.



Hong Kong’s young people need more government support


First, Professor, Maggie Lau from Lingnan University, and Professor Ngai Ming Yip, from City University of Hong Kong, explained what their recent study into the current state of 'Parental Housing Support in Hong Kong' had revealed.


With Hong Kong property prices among the highest in the world, and the provision of new public housing slowing, Prof Yip said that their survey had found most parents thought that housing opportunities for young people were worse than when they were of a similar age.


When it came to those parents expecting to provide their adult children with financial help, he noted that this group consisted of 34 percent of homeowners, 25 percent of members of the Home Ownership Scheme or Tenants Purchase Scheme, and just under 15 percent of Public Rental Housing tenants.


What Prof Lau described as 'active' family housing help, whether financial or non-financial (in the form of co-residence), was become increasingly critical in shaping the housing trajectory of emerging adults in Hong Kong.


Prof Lau concluded with her, and Prof Yip’s, recommendations for policy changes to help restore young people’s ability to access the general housing ladder - without the need for family assistance. Because of the growing numbers of young people who are too poor to afford a private flat but too wealthy to qualify for public rental housing, they advocated the government expanding the subsidised homeownership scheme, through changes to the discount rate, to the application eligibility criteria, and to premium responsibilities.



Has generational housing inequality strengthened family bonds?


Next to speak was Professor Richard Ronald of the University of Amsterdam. In his presentation, 'Housing Careers, Intergenerational Support and Family Relations', Prof Ronald focused primarily on the changing picture in Northern Europe. Here, the level of home ownership among 18-34 year olds had fallen, following the global financial crisis. “This is similar to what we've seen in Hong Kong,” Professor Ronald noted.


The accelerating commodification of the home, with property as the primary mode of wealth accumulation, coupled with the post-crisis emergence of a ‘generation rent’, would have seemed likely to pit young against old. Instead, however, Prof Ronald argued, high house prices have in fact strengthened family bonds - for those with access to the necessary resources.


A 2018 CML report found that 65 percent of new property buyers in the UK were helped by their parents, with parents involved in over 26 percent of all property transactions, Prof Ronald pointed out.


“In the UK, we’ve had a one million increase in the number of landlords in the last 10 years.”


Alongside this, there’s been a 64 percent growth in the number of renters since 2007, to 4.5 million, with around two million of these aged under 35. Therefore many older people are renting out properties to younger people, but then channeling some of this wealth back to the younger members of their own families through gifts.


A similar situation prevails in the Netherlands with housing prices doubling in Amsterdam since 2013. “The private rental sector in Amsterdam has increased by about 20 percent in just the last seven to eight years,” Prof Ronald explained.


While many parents support their adult children as they move into rental housing, it’s usually not until they settle down with a life partner that large sums of money are transferred.


As well as having a large welfare state and benefit payments available to young adults, the Netherlands government also offers tax breaks for parents helping out their children with home purchases, and supports a ‘parent-mortgage’ scheme.



Family ties are still key in Taiwan


The webinar’s final presentation, titled Parental Support and Living Arrangements among Young Adults in Taiwan, was given by Professor William Li from the Department of Sociology at National Dong Hwa University, Taiwan.


“Taiwan has seen a regeneration of the newly extended family system in the highly urbanized society,” Prof Li pointed out.


Despite other changes, Taiwan remains a familialistic, rather than an individualistic, society. In the 1960s, the family was responsible for the grown-up adults' housing, as the family wealth was commonly shared and collectively owned, and living in harmony with one’s offspring was an ideal. In the 2000s, nearly 50 percent of adult children continued to co-reside with their parents, and there is still no strict norm of leaving home after entering adulthood. Housing derived from the family is not seen as a form of gift or loan, but part of a continuity of family-owned property.


While 44.5 percent of those aged 61 and over in Taiwan are homeowners, this figure drops to 23 percent among 31-40 year olds. What’s more, 40 percent of Taiwan’s housing stock belongs to multiple-housing owners.


From his own research, Prof Li said it was clear parental housing support in Taiwan is a widespread phenomenon, and there are two different housing pathways for young people. One is via parental housing support such as co-residence or living in the parents’ secondary property. The other route involves entering the housing market with or without parental support.