Rent-to-buy housing plan on Tsang's agenda

PUBLISHED : Thursday, 16 September, 2010, 12:00am
UPDATED : Monday, 03 October, 2016, 5:52pm

Chief Executive Donald Tsang Yam-kuen is expected to unveil next month a new subsidised-housing plan under which people will be able to rent to buy, with rent paid counting towards the purchase price.

The latest in a series of measures floated in response to concerns about soaring property prices it would, like the shelved Home Ownership Scheme (HOS), be aimed at people earning too much to qualify for public housing and too little to afford to buy a flat.

The proposal came to light two days before the end of a public consultation on whether the government should subsidise people's flat purchases.

It also came as Hong Kong General Chamber of Commerce chairman Anthony Wu Ting-yuk - who earlier suggested a similar scheme - called on the government to resume regular auctions to increase land supply.

Observers said the impact on the market would depend on how many new flats were built but it was unlikely to have a big effect as the flats would not be directly available for sale.

An official familiar with the discussion on subsidised housing said qualifying buyers would be able to rent the flats for a specified period - probably three to five years - after which they would have to buy or move out. Rent paid would count towards the purchase. 'The advantage of the scheme is that aspiring homeowners would not need to rush to buy a flat when property prices were soaring because they would enjoy a breathing space of a few years,' the official said.

The government preferred the idea to providing low-interest loans which could further fuel the overheating property market.

It is understod to be reluctant to relaunch the HOS - shelved in 2002 as part of efforts to boost a market slumping at the time - so the flats would probably be built by statutory bodies like the Housing Society rather than the Housing Authority. There was no word on how prices would be set, whether there would be discounts or how big these would be.

At present, a family of four qualifies to rent a public flat if household earnings do not exceed HK$16,916 a month.

Professor Eddie Hui Chi-man of Polytechnic University's building and real estate department said the government could consider building 2,000 to 3,000 flats a year, or even fewer during a trial run.

It would not need to offer big discounts if the scheme achieved its aim of helping people save money, he said.

Dr Lau Kwok-yu, associate professor in City University's public and social administration department, said the government needed to give more details of the social and financial costs and benefits of its proposed housing scheme, and compare them with other programmes such as the HOS, before launching it.

'Without the information, it's difficult to comment about whether the idea is good or not,' Lau said. 'What if some occupants' incomes decline and they cannot afford to buy the flat or afford to rent other flats in the market?'

Dr Lawrence Poon Wing-cheung, chairman of the Hong Kong Institute of Surveyors' housing policy panel, said the government should check tenants' incomes regularly 'to avoid certain people getting a lifelong subsidy based on a single assessment at a certain time'.