Housing Authority surplus hits $9.24b

Stacy Shi

The Housing Authority recorded a consolidated surplus of HK$9.24 billion in the current fiscal year, which is expected to increase to more than HK$15.4 billion in 2025-26.

The surplus for the coming fiscal year comprises HK$661 million from public rental housing mainly due to the 10 percent increase in public housing rents last year, over HK$1.36 billion of commercial operating accounts and about HK$13.3 billion from the sale of subsidized home ownership flats.

But according to its finance committee chairman Billy Mak Sui-choi, the capital expenditure required for major improvement works to existing public rental housing estates will cost another HK$700 million in 2025-26.

The projected commercial properties operating account is also down 11 percent over 2024-25, mainly due to a weak retail market environment.

However, the consolidated account does not reflect the year-on-year increase in construction expenditure, and with the gradual commencement of projects in the latter five years of the Long Term Housing Strategy, the authority's cash and investment balances will be adjusted downward from the projected HK$65.8 billion at the end of March this year to about HK$40.2 billion at the end of March 2029, Mak said.

Construction expenditure for public housing developments is the authority's largest expenditure, accounting for over 95 percent of the total capital expenditure, he said, adding that the estimated construction expenditure is expected to rise from HK$28 billion in 2024-25 to HK$49 billion in 2028-29.

The cost of each public housing unit has also increased from HK$920,000 in 2022-23 to HK$970,000 in 2023-24, and that of each Home Ownership Scheme unit has increased from about HK$1.09 million to HK$1.15 million.

But Mak said that despite rising costs, the current projected cash flow would be sufficient to meet its operation in the next few years.

"Currently there will be no financial burden, but we would have to critically examine the future construction costs, such as through adopting the modular integrated construction method to reduce costs."

The authority may also review the pricing mechanism for HOS flats from time to time and make adjustments in the future.