Discount policy counter-productive

PUBLISHED : Saturday, 27 January, 2001, 12:00am
UPDATED : Saturday, 27 January, 2001, 12:00am

I refer to the letter from Stephen Brown headlined, 'Rather daft rule' (South China Morning Post, January 12), regarding the Housing Authority's resumed sale, earlier this month, of Home Ownership Scheme (HOS) flats at a discount of about 44 per cent on market value. This followed only a six-month suspension imposed because of the rapid drop of property prices in recent years.

The general principle we rely on in Hong Kong is that the market should be left alone to look after itself. The Government must sort out its public-housing policy.

Presently, the administration is selling HOS flats at a huge discount, to people who would not even need a mortgage.

Surely, it would be better for officials to concentrate their efforts on meeting the housing needs of those people who cannot afford to buy a home or rent private accommodation, by providing a greater number and variety of low-rental accommodation. This would help clear most of the applicants on the public-housing waiting list in the shortest possible time.

In the long term, people given low-rental public housing, would eventually be able to save up enough money so they could buy their own homes, partly through the subsidised home-ownership schemes and loan schemes operated by the Housing Authority and the Housing Society.

Tung Chee-hwa was quoted as saying to legislators, 'We want people to feel that their homes will be a good investment for the future and a store of value which they can pass on to their children.'

However, I cannot see how the local property market can improve at a steady rate in the years ahead if the Government keeps on putting up large numbers of lower-than-market-price HOS flats each year which compete with the private sector.