Home loan hope for first-time buyers

PUBLISHED : Saturday, 11 April, 1998, 12:00am
UPDATED : Saturday, 11 April, 1998, 12:00am

Young professionals can expect to buy new flats of about 800 square feet in urban areas when government loans to help first-time buyers go on offer next Friday.

But some property agents are criticising the decision to launch the Home Starter Loan Scheme while the property market is in a slump.

Families with incomes not exceeding $70,000 a month can apply from Friday for 6,000 low-interest loans of up to $600,000 each.

The scheme, to be administered by the Housing Society, was announced by Chief Executive Tung Chee-hwa in October as part of his pledge to have 70 per cent of families owning their own homes by the year 2007.

Hong Kong Property Services (Agency) managing director, Michael Choi Ngai-min, said the scheme might be most attractive to young professionals with monthly incomes of between $55,000 and $70,000.

'Certainly, this group of people have some savings and they are looking for good living quality rather than just a shelter to cover their heads,' Mr Choi explained. 'With the help of a $600,000 loan, they should be able to afford an 800-square-feet unit in the urban area, which now costs about $3.5 million.' But he doubted if people wanted to buy flats under current market conditions. 'Some people still worry that prices could drop further,' he said.

A society spokesman was wary of predicting the level of response to the new scheme.

'There is no target group,' she said.

'Anyone eligible can apply. But certainly, we will consider ability to repay the loan if someone earning, say, $3,000 a month, files an application.

'There is no need for people to rush as there is no application deadline. The loans will be offered on a first-come, first-served basis until the 6,000 quota for this year is taken up.' The society will announce details of the scheme on Thursday.

Meanwhile, successful applicants for the latest batch of 2,168 sandwich-class housing scheme units will be allowed to start choosing their flats this month.

The development follows a two-month wait.

The society said the delay was due to the regional currency crisis, which prompted some buyers to petition for financial help.

Last month, the society announced a $600 million mortgage interest subsidy over the next two years for sandwich-class housing estate buyers.