C.Y. Leung unveils his housing strategy
Chief executive candidate Leung Chun-ying yesterday pledged to address the housing needs of the middle class by offering diverse types of subsidised flats and reducing mortgage costs.
In his first detailed briefing on his election platform, Leung was cautious in explaining how his proposed measures would not threaten the private property market, steering clear of previous controversies about causing a property slump.
On the issue of the middle class who do not qualify for subsidised public housing but are also unable to afford expensive private flats, Leung said: 'The proposed measures aim to increase choices and mobility for young, middle-class people.' However, the measures 'should remain flexible', Leung said, stressing that all housing measures should be responsive to global economic conditions.
Besides proposing the amount of home loan interest that can be claimed for income tax deduction - from HK$100,000 to HK$150,000 - Leung also suggested reviving the so-called sandwich-class housing, which was scrapped by the administration of former chief executive Tung Chee-hwa in a bid to restore stability to the market after the Asian financial crisis.
Similar to the existing subsidised Home Ownership Scheme (HOS), sandwich-class flats would be sold at a concessionary price and subject to a five-year resale restriction. However, the income limit set for them is higher than that for public housing.
To make affordable housing more readily available, Leung also proposed waiving the land premium of 5,000 secondary HOS flats sold to 'white-form applicants' - prospective buyers living in private units who did not receive a housing subsidy. Instead, they will be subject to income and asset limits to be announced by the government prior to the sales.
Under the current policy, HOS flat owners must pay a land premium - the market value of the subsidy given by the government at the time of purchase - before reselling their flats.
As the land premium usually involves hundreds of thousands of Hong Kong dollars, only about 2,000 transactions of second-hand HOS flats are recorded annually on average.
Leung said he would be careful not to apply the zero-premium measure to all buyers as it might threaten the private property market. He stressed that his proposed quota of 5,000 flats was less than 1 per cent of existing HOS flats. A former cabinet adviser of Tung, Leung was blamed for introducing a target of building 85,000 flats a year during Tung's tenure. The goal was scrapped after property prices slumped.
However, former chief secretary David Akers-Jones said the housing slump was caused by the Asian financial crisis.
Leung said his housing policy would be based on scientific studies of the public's needs and the composition of the population.
Single people aged 35 and above, who make up a growing number of applicants for public flats, would be provided with public units built on small vacant sites on the urban fringe, Leung said.
A survey would also be conducted on the distribution of subdivided flats, he added.
Hong Kong's housing policy would also be reviewed every five years by an advisory committee comprised of academics and analysts.
Poon Wing-cheung, a property professor at City University, said Leung's proposed policy was more comprehensive than the existing, piecemeal housing measures.
However, he said Leung should offer further explanations about how he would increase land supply for housing.
Wong Leung-sing, associate research director at Centaline Property Agency, questioned whether there was enough land to meet Leung's targets, adding too much intervention would be unfavourable for the property market.
Chief executive candidates Frederick Fung Kin-kee and Albert Ho Chun-yan, both pan-democrats, said Leung's proposals were unfeasible and lacked long-term strategies.