Home scheme cuts studied
THE Government is studying the feasibility of cutting the construction volume of flats under the Home Ownership Scheme (HOS) rather than scrapping it, according to Secretary for Housing Dominic Wong Shing-wah.
Speaking on a radio phone-in programme, Mr Wong rejected claims that the administration would stop building flats under the scheme, which provides government-built flats at below-market prices.
Mr Wong said officials were looking at an alternative to the scheme that would offer loans to allow people to buy homes in the private sector rather than HOS flats built by the Housing Authority. Under the proposal, part of the funds earmarked to build HOS flats will be used as loans for the purchase of private flats.
But Mr Wong said even if fewer HOS flats were built, the Government would not increase the construction volume of public housing.
Democratic Party spokesman on housing, Lee Wing-tat, urged the Government not to rush into a decision on cutting the volume.
'In the absence of sandwich-class housing, HOS flats are the only buffer or competitor to private housing. Cutting the construction volume of HOS flats by a large proportion would leave the Government with no way to regulate the property market if developers substantially raise the prices of private housing in the next two or three years,' Mr Lee said.
He said the Government was relying on the surplus of the sale of HOS flats to build public housing rentals.
In the 1997-98 financial year, the surplus was $12.7 billion while the forecast for 1998-99 is $19.4 billion.
Calculating on the basis that the construction cost per housing unit is $400,000, the Housing Authority can build more than 30,000 public housing rentals with $12.7 billion.
Last Wednesday, Tung Chee-hwa said the Sandwich Class Housing Scheme would be suspended indefinitely because low-to-middle-income earners could now afford private-sector flats.
Officials would study whether the ownership scheme should continue to provide flats on such a large scale.
Asked whether the Government planned to reduce the price of new HOS flats, Mr Wong said they would be set according to public affordability rather than market fluctuations.