Three land sites to open for tender for private developers to build subsidized homes

The government will put up three land sites, including two in Tung Chung and Chai Wan, for tender from 2023/24 for private developers to build subsidized housing under the latest Private Subsidized Sale Flat Pilot Scheme. 

At a press conference on Tuesday afternoon, Secretary for Housing Winnie Ho Wing-yin said the subsidized homes would be clearly defined as private development projects in order to ensure financial viability and quality assurance. 

“We won’t buy back the unsold flats,” Ho said. “We also request developers to employ an independent checker, who must not be related to the developers or their relevant subsidiaries. 

“The checker will be responsible to conduct the final inspection work. If any things go wrong, the checker will have to report to recognized personnel in charge of the project. Finally, the checker will submit a full report to us as well.” 

One of the land sites is in Tung Chung Area 122, with some 1.4 hectares of land, on which some 1,600 units will be built. Meanwhile, some 0.5 hectares of land at the site on Cheung Man Road in Chai Wan can provide about 700 units. 

The two sites will open for tender by the end of this year and the first quarter of 2024, respectively. 

The homes will be sold at 35 percent off total market prices. And buyers’ criteria for this pilot scheme will be the same as that under the Home Ownership Scheme. Developers can make minor adjustments to target a particular group of buyers but must obtain final approval from the housing chief. 

The lease will outline the requirement of the minimum number of flats. The saleable area of the flats will be no less than 26 square meters (~278 square feet), and at least 70 percent of flats must have a saleable area of no less than 34.8 square meters (~374 square feet). 

“If the buildings are of poor quality, developers must make relevant improvements before we accept the independent checker’s report. As long as we don’t accept the report, I won’t issue the Certificate of Compliance for developers to complete the transactions,” Ho said. 

“There could be grave consequences that can make developers to do a good job,” she added. 

As for the land premium, the reserve price for the sites in the public tendering approach will be set, taking into account a 35 percent discount rate. 

For sites in the private land approach, the land premium will be set at a concessionary rate of one-third of the market value for the domestic portion and the total market value for the non-domestic portion. 

Developers will be responsible for building welfare and community facilities, but relevant costs can be deducted from the land premium. 

They can also provide mortgage arrangements, and the government will discuss mortgage insurance with Hong Kong Mortgage Corp Ltd.