Low response to housing scheme

STRICT application requirements and tighter mortgage regulations have been cited as reasons for the poor response to the sandwich class housing scheme.

Only 1,557 submissions - about four per cent of those eligible - had been received by yesterday, two days before the application deadline.

The number was far below the estimates of the Housing Society, which originally hoped to select 2,000 families for interviews.

Officials yesterday insisted that the requirements were strict to ensure the first phase of the scheme would benefit those with a pressing need for buying homes.

But legislators and grass-roots organisations questioned whether the aim of the scheme to assist the sandwich class could be achieved if the requirements were out of reach.

Housing Society director (estate management) Wong Lai-chun said it was too early to judge the public response.

Asked if the application criteria were too strict, Miss Wong said: ''I don't think so. It was always our intention to offer places in the first phase of the scheme to the most needy families.'' She said there was no plan to extend the application period.

The $2 billion scheme was officially launched on August 23 to help the territory's 40,000 sandwich class households buy private apartments with loans of up to $500,000.

An eligible family must have at least three members and a total monthly income of between $20,000 and $40,000.

The applicant, the main breadwinner of the family, must have lived in Hong Kong for at least seven years.

''We cannot guess how many applications we are going to receive,'' Miss Wong said. ''We have had about 8,000 telephone inquiries about the scheme.'' Miss Wong said a full review would be carried out after the first phase was implemented.

The society will distribute questionnaires to gauge the opinion of the first batch of applicants and look at possible improvements, she said.

Miss Wong said the places left unfilled would be offered in the second phase.

United Democrat legislator Lee Wing-tat said home-buyers might be discouraged by the harsh requirements.

''I believe we need a careful review after the first phase, [for example] if we really need to require the applicant to be the breadwinner of the family,'' said Mr Lee.

His view was echoed by the vice-chairman of the Association for Democracy and People's Livelihood, Leung Kwong-cheong, who said he was not surprised to see the cool response because the strict requirements left so few people eligible.

He suggested that requirements should be relaxed to allow public tenants to apply. That could also help encourage them to vacate their rental flats for the needy.

Hong Kong Real Estate Agencies Association chairman Ng Kam-chun said a contributory factor was the recent bank regulations to limit the mortgage loan draw-down period and impose heavier penalties on early repayment.