The government must do more to make Hong Kong property affordable
The government should consider helping buyers through different channels, such as offering more subsidies and tax concessions
Homebuyers can be excused for staying away from the latest batch of subsidised flats on offer. A shoe-box unit of no more than 600 sq ft in Kai Tak is selling at HK$6.6 million. The smaller ones are also expensive, costing more than HK$3 million still. That they have already been sold at 20 per cent below the market price by the Urban Renewal Authority has left buyers even more underwhelmed.
The lacklustre response to De Novo is to be expected. Although some 1,560 hopefuls streamed through the show flat on the first day of the sale, many said the units were overpriced. But some said they might still submit an application anyway pending better options in the private market.
The sorry state of affairs speaks volume for the city’s housing conundrum. Since assuming office in 2012, Chief Executive Leung Chun-ying has been making every effort to stabilise property prices and to increase flat supply. The conversion of units originally reserved for people affected by urban renewal is a step by URA to complement the government’s housing supply target. But with just 338 units up for grabs, they are just like a drop in the ocean. This is not helped when the prices, despite signs of further reductions, are still out of the reach of many people.
The latest response is noticeably less enthusiastic than those to the subsidised housing schemes of the Housing Authority and Housing Society, mainly because the other two offer more generous discount to buyers. It has been argued that URA has a different mission and has therefore adopted different principles and pricing strategies. But if the self-financing body focuses too much on balancing its books, it may defeat the purpose of offering affordable housing to the needy. A review of the approach is advisable.
As long as demand outstrips supply, property prices will stay high. Apart from boosting land supply, the government should also consider helping buyers through different channels, such as offering more subsidies and tax concessions.