The central focus of this paper is to identify the nature of the housing gap and housing strategies of young people in Hong Kong by investigating and analyzing the homeownership preference and needs, household resources, and housing options. The paper will also identify the role of government policy in creating or exacerbating the housing gap. Because of homeownership promotion, housing options are narrow in Hong Kong. Young people have few choices, but to become homeowner in order to fulfill their housing needs. The paper will contribute to the debate about housing policy in Hong Kong and the international theoretical and housing debate about housing preferences and needs.

In Hong Kong, homeownership is a sacred cow. The desire to own a home has grown more intense in the last decade. Homeownership is seen as an essential component of household lifecycles and as a key ingredient in ideological constructs. In order to become a homeowner, people are more likely to make big sacrifices. Too many people are pressurized into buying a home in order to display status and hopefully, achieve income security. But in Hong Kong 1998, Asia finance crisis, has proved that this high hope on homeownership is no longer true. However, the Hong Kong Government still promotes homeownership and sets the target of achieving a homeownership rate of 70% by 2007. As a consequence, the tenure choices will tend to be fewer.

The young people may develop their housing strategies such as adjusting household arrangement, finding ways to increase their income, changing expenditure patterns in response to their housing constraints and options. However, their housing strategies may not be easily to adopt nowadays and in the future. For example, as education and training periods are prolonged, it may be more difficult to delay child-birth for saving money. As there is a trend to flexible employment, their incomes and job security may become unstable. As there was great inflation in the last decade, even if there has been deflation recently after the Asia finance crisis, young people may not be able to save much money by decreasing expenditure. There is a wide gap between the aspiration and ability of young people to become homeowners.