Government intervenes to ease housing shortage

PUBLISHED : Tuesday, 16 March, 2010, 12:00am
UPDATED : Tuesday, 16 March, 2010, 12:00am

Relief is on the way for home-hunters struggling to find a place they can afford - the government announced yesterday that thousands of flats left over from two subsidised housing schemes will be put on sale.

The move, aimed at cooling the property market, will see the sale of 4,000 flats under the Housing Authority's Home Ownership Scheme and 374 under the Housing Society's sandwich class scheme.

But a relaunch of the HOS scheme was ruled out.

An authority committee will discuss the proposal at a meeting next week. Approval is widely regarded as procedural only, given that it is a government initiative.

The Housing Society said its 374 units - in three projects - were ready for immediate sale.

Both schemes aim to sell government subsidised apartments to those who might not be able to afford private flats, with the sandwich class housing scheme catering more for middle-income families while the HOS is for lower-income groups.

Housing minister Eva Cheng said she expected a boost in the supply of small and medium-sized flats in the next few months.

'We are also actively considering measures to revitalise the secondary market of HOS flats,' Cheng said.

Options include new arrangements to make payment of the land premium more flexible, simplifying the procedures for selling and buying HOS flats, and more preferential mortgage-guarantee arrangements for HOS flat buyers. Cheng said the authority would start discussing the options in May.

There have been calls recently for the HOS to be relaunched because of rising property prices, which are partly the result of the economic recovery, near-zero interest rates on savings and low mortgage rates.

The HOS was scrapped in 2002 amid pressure from private developers, who said the scheme interfered in the market. But some developers now support a resumption of the scheme to pacify social discontent.

Executive Council convenor Leung Chun-ying called for caution, saying government policy should not affect the stability of the market.

Cheng also said there was no plan to resume the HOS.

Last month Financial Secretary John Tsang Chun-wah said the government 'would not lightly return to the market', when asked if he would consider relaunching HOS.

But Executive Councillor Anthony Cheung Bing-leung said the idea of building a small number of HOS units to meet the needs of low-income families was worth exploring.

In an interview with RTHK he also floated the idea of allowing HOS owners to pay premiums by instalment when they resold their flats.

At present, HOS owners can resell their flats on the open market after five years as long as they have paid a premium to the authority. They can also sell their flats to existing tenants on public estates after three years without the need to pay a premium.

The chairman of the Legislative Council's housing panel, Wong Kwok-hing, rejected the government measures as 'cosmetic'.

'The question is, after selling all the 4,000-something units, what next? There are no more government flats to sell. So, what else can the government do to cool the market when needed?' Wong asked.

Democrat Fred Li Wah-ming, also an authority member, said he would raise the issue of resumption of HOS at the authority committee meeting next week.

Dr Lawrence Poon Wing-cheung, of the Institute of Surveyors, said building more HOS flats did not address the right question because the heated market was mainly due to low bank rates, which encouraged people to invest in property.