Despite the Housing Authority's (HA) government-mandated
goal of phasing out its involvement in the sale of public housing
units, the authority announced yesterday that it will still release
for sale up to 25,000 low-cost flats by the end of the year, while
also eliminating its loan scheme for low income home buyers in the
The two moves, coming in separate announcements, are part of the
authority's move away from direct involvement in the property market.
The low purchase price of the sale flats should not effect the
property market because they are pegged to low income tenants and
cancelling the Home Assistance Loan Scheme is meant to get the HA out
of the financing business.
Still, ending the loan scheme raised concerns about pressures on the
private housing market.
Centaline Property Agency executive director Louis Chan said first
time buyers are likely to be hardest hit by the decision. "Low-income
families or some first time buyers may not be able to afford down
payment for buying properties if they are no longer subsidised by the
government," he said.
Prices and transaction volume for small size homes, valued at below
HK$1.5 million each, are expected to fall by five per cent and 20 per
cent respectively in the short term due to an expected decrease in the
number of first time buyers, he predicted.
"First time buyers without sufficient capital may scrap plans to buy
An HA committee member, Ho Hei-hwa, expressed concern that the move
would cause more people to apply for public housing and this will
force the authority to build more public housing flats. Commenting on
the end of the loan scheme, Ng Shui-lai, chairman of the subsidised
housing committee at the Housing Authority, said: "The decision on
home ownership should be left to the market and should not be swayed
by intervention from the government with the provision of a loan
The scheme provides interest-free loans of up to HK$530,000 or monthly
mortgage subsidies of up to HK$3,800 to help low-income individuals or
families to buy their own flats.
More than 8,000 low-income families are subsidised, although the
scheme was halted last year pending a review.
Meanwhile, the authority said that a batch of 5,100 flats in Cheung
Wah Estate, Fanling, will go on sale by the end of this month pending
the completion of a drainage survey and necessary repair work.
Flats in three remaining estates including Lei Tung Estate, Po Lam
Estate and Shan King Estate will be sold by stages in the coming
months for a total of about 25,000 this year.
The flats to be released for sale are under the scheduled Tenants
Purchase Scheme Phase 6A that was announced a year ago. Ng said he did
not anticipate the release having an impact on the private housing
An additional 25,000 flats under Phase 6B should be released for sale
next year. An HA spokesperson said there were no further plans by the
authority to sell flats after Phase 6B is completed.
"We plan to concentrate on our core business, which is providing
housing for the poor," spokesperson Esme Lau said. "Home ownership
is not our key business."
The authority's Subsidised Housing Committee yesterday endorsed the
sales plan, the list price of which is set at a discount of 60 per
cent off the assessed market value.
An additional special credit of 30 per cent of the list price will be
offered to tenants who buy their flats within the first year.
A credit at 15 per cent will be offered in the second year.
The list prices of 99 per cent of the flats are below $300,000 and the
purchasers are to spend no more than 1.12 times their current average
expenses on housing.
Committee Chairman Ng Shui-Lai said tenants' affordability has always
been the guiding principle in determining the Tenants Purchase Scheme
flat prices, adding that the guideline also ensures that the tenants
will not be spending more than double the rent they are paying after
Analysts said the sales were unlikely to upset the private property
market, which has seen price rises of as much as 40 per cent in the
past eight months.
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