Buyers must ride their luck in house hunt

PUBLISHED : Friday, 13 November, 2009, 12:00am
UPDATED : Friday, 13 November, 2009, 12:00am

It may be luck, in addition to cash, that people will need most to get one of the latest batch of Housing Authority home ownership scheme (HOS) flats up for sale, with more than 10 buyers expected to be competing for every flat.

Bargain hunters flocked to see show flats and snap up forms as applications for the 1,392 flats - sold at roughly 70 per cent of the market price - closed yesterday.

More than 192,800 prospective buyers visited the show flats and the authority's HOS centre during the two-week application period.

A housing official familiar with the HOS sale said that judging from the initial response, it would not be surprising to see an oversubscription of more than 10 times.

'People snapped up forms quickly and we had to print extra,' the official said.

In the sale last year, only about 11,000 applications were received for the 3,200 HOS flats on offer. The recession was blamed for the relatively poor interest.

An authority spokesman said: 'It is too early to comment on the oversubscription rate. We have not counted the number of forms we received and some applicants might choose to send in their forms by post.'

The keen interest in this year's sale comes amid fears of an overheated private property market, prompted by reports that an apparent world record HK$71,280 per square foot had been paid for a Mid-Levels flat.

Launched in 1978, the HOS allowed eligible families to buy homes from the authority at a discount, usually 70 per cent of the market price. The government scrapped the scheme in 2002 after pressure from private developers.

Those left unsold at the time have been put on sale in phases since 2007. The authority plans to sell the last 4,000 HOS flats next year.

With rising concern over private property prices, there have been calls to resume the HOS to help cool down the market and provide affordable housing. Data compiled by the international property consultancy Jones Lang LaSalle, showed prices of mass-market and luxury residential flats had rebounded by 22 per cent and 32 per cent respectively from the dip in the fourth quarter of last year.

But it opposed relaunching the HOS, saying that resuming regular land auctions was the right solution.

'The market upsurge should be seen as part of a natural recovery cycle rather than an unhealthy, overheated expansion,' the firm's international director, Joseph Tsang, said.

Tsang attributed the rise in prices partly to the tight supply in development sites, and low interest rates.

The HOS would not meet the needs of middle-class buyers who would not be eligible according to the strict application criteria, he said.

'[A healthy development] can be achieved by resuming regular land auctions, particularly for the smaller plots of land. The government may [also] improve the transparency of the land application system by disclosing the unsuccessful bids for sites,' Tsang said.

The existing system allows developers to trigger sites for auction if their bids are sufficiently close to the government's reserve price, which is not disclosed.

The Development Bureau was not prepared to comment yesterday.

Home sweet home

Thousands turned out to see the latest flats being offered under the Housing Authority's home ownership scheme

The number of buyers that visited the HOS show flats during the two-week application period was more than: 192,800