Sun Hung Kai Properties

SHK calls for first home-buyer help

PUBLISHED : Wednesday, 11 August, 1993, 12:00am
UPDATED : Wednesday, 11 August, 1993, 12:00am

SUN Hung Kai has called on the Hong Kong Government and the property industry to work out a plan to help first-time buyers find a home they can afford.

The developer wants a scheme devised to help genuine home buyers who are trapped by the Government-imposed 70 per cent mortgage ceiling.

Many families are unable to meet the guideline requiring a 30 per cent down payment to be made at the point of purchase.

Banks have been enforcing the Government ruling since it was introduced 19 months ago.

It was introduced to curb rising prices in the mass residential market, which were spiralling upwards mainly because speculators were making a kill on the market.

The Real Estate Developers' Association, which is keen to see an end to the ceiling, has been in regular contact with the Government on the subject.

But there are no signs any changes will be made soon. The Monetary Authority believes the time is not right to do so.

Michael Wong, manager of Sun Hung Kai Properties Corporate Planning and Investment department, said the ceiling had been in force long enough and urged the Government to try something new.

''We want to see the Government at least trying to relax the limit on a selective basis to the genuine first-time buyers,'' he said.

''From our experience, we know there are a number of people who want to buy but cannot afford to because of the 30 per cent down payment.'' Mr Wong suggested a scheme which could be organised by the Government, and would require buyers in certain developments to keep their home for at least two years.

But he said Sun Hung Kai, which was offering selective financial assistance to some buyers in its own projects, would not impose such a scheme.

That would be for the Government and the industry as a whole, he added. Some developers might not implement it if there was not a broad agreement.

He said: ''This would be best done by the Government and not the private sector.

''It is difficult to stop the speculators and for a private developer it would be more difficult to enforce.

''If the Government is willing to consider a scheme then we will be willing to co-operate.'' Sun Hung Kai is in favour of the Sandwich Class scheme, which gives about 1,000 people earning between $20,000 and $40,000 a month up to a $500,000 loan to help them make the down payment.

Flats aimed specifically at this group do not come on stream until 1996.

Mr Wong said: ''We understand what the Government is trying to do, but it does not appear that they are going to relax things in the next six months.

''They have designed the Sandwich Class scheme but, at the moment, that will only help about 1,000 people a year.

''In the next two years, home buyers who cannot afford the down payment will still be disappointed.

''I think the Government should devise something in the interim period to satisfy those who want to buy but cannot afford to do so.

''We are trying to convince the Government that some assistance should be given to help these people.'' Sun Hung Kai has a vested interest in a relaxation of the ceiling.

Many of its residential projects, particularly in the New Territories, where the population is growing, are targeted at families most affected by the rule.

Mr Wong admitted this was ''concerning'' the company but it had no plans to increase cash assistance to buyers in Sun Hung Kai developments.

The company operates two methods of payment on homes now. The first is the normal way of paying, making a 30 per cent down payment and getting a 70 per cent mortgage from the banks.

The other is an initial down payment of 15 per cent with the rest being paid over 12 months in three stages.

Mr Wong said the company operated a tough screening process on buyers who qualified for the preferential scheme.

Mass residential and industrial projects developed by Sun Hung Kai were usually sold off.