Home savings plan for the young pushed

Eunice Lam and Michael Shum

The Federation of Trade Unions has proposed that the government implement a scheme to assist young people in saving for down payments on subsidized flats.

This initiative, meant for people aged 21 to 40, would include a guaranteed right to purchase a subsidized flat.

Sources indicate that the government is considering the proposal, which aims to prevent young people from limiting their career choices in order to stay below the income cap for public rental or subsidized housing.

The discussion follows a phone survey conducted last month, which included 303 respondents aged 18 to 40.

Many participants noted the widening gap between rising home prices and the incomes of the younger generation.

The survey revealed that about 80 percent of respondents feel more secure when owning a flat, and 70 percent indicated they would work harder if they could own a property.

Despite the government's provision of subsidized housing, the overall supply remains limited, the survey said.

Bill Tang Ka-piu, a lawmaker from the federation, emphasized the need for a "breakthrough policy."

He proposed that the government establish a contribution scheme for individuals aged 21 to 40 who do not yet own a flat.

"Under this scheme, participants could contribute an amount equivalent to 20 percent of the median salary for employees aged 25 to 34 - about HK$4,000 - into government-designated bonds or funds," Tang said.

"At the conclusion of the scheme, participants could use the principal and interest accrued as a down payment for subsidized flats, with a guaranteed right to purchase a public housing unit."

Tang suggested that the government consider launching a three-year pilot program.

"While demand for Home Ownership Scheme flats remains high," Tang acknowledged the potential controversy over the introduction of a new queue for young buyers, as it could reduce chances for existing applicants.

The federation has recommended that the scheme focus on new development areas, such as the Northern Metropolis, Area 137 in Tseung Kwan O and the Kau Yi Chau Artificial Islands.

Tang proposed that the property prices under this scheme be positioned between those of the Home Ownership Scheme flats and the "Starter Homes" Pilot Scheme for Hong Kong residents. He also suggested inviting private developers.

Tang also recommended prohibiting the resale of public housing units.

Anthony Chiu Kwok-wai, executive director of the Federation of Public Housing Estates, proposed that the government reduce stamp duty for young buyers and increase the availability of subsidized rental units.

"We should not solely focus on flat ownership," Chiu said. "Our federation previously suggested referencing rental units in the Housing Society's Group B Rental Estates. However, those flats are limited to around 1,000 units. In the future, could we allow the private market to build these subsidized rental units?"