Rental component in housing plan for Hong Kong middle class may be dropped

Rental component of a proposed rent-or-buy programme for middle class could be dropped to satisfy pent-up demand to acquire property

PUBLISHED : Saturday, 18 August, 2012, 12:00am
UPDATED : Saturday, 18 August, 2012, 5:17am

Housing minister Anthony Cheung Bing-leung said a new rent-or-buy housing programme for the middle class could be reviewed in the upcoming long-term housing strategy.

In response to a housing adviser's earlier suggestion that the rental option of the My Home Purchase Plan should be dropped to satisfy the keen demand in buying, Cheung said yesterday that he would not rule out a review of the scheme to be launched in the coming few months.

"The rental option is a characteristic of the My Home Purchase Plan … There are positive views, but there are people who disagree … as to what role it should play and whether the contents need a review, I won't rule out [a review]," he said on a radio programme.

The long-term housing strategy Cheung was referring is to be steered by a committee of cross-departmental officials and professionals, who will assess the needs of different population groups. The work to forecast housing demand was shelved by the previous administration.

The subsidised My Home Purchase Plan, announced by former chief executive Donald Tsang Yam-kuen in 2010, is for families earning no more than HK$40,000 a month.

The first project under construction in Tsing Yi will yield 1,000 homes and will open to applications at the end of the year. Future residents can choose either to buy the flat, or rent it for a few years, while saving up to buy it later. The sale price will remain fixed during the lease period.

Tsang's government pledged to launch five projects under My Home and deliver 5,000 flats in total.

But Yeung Ka-sing, chairman of the Housing Society which manages the scheme, has repeatedly criticised it for being a financial burden on society and difficult to administer.

He has given the government a counter-proposal to revive a so-called sandwich-class housing plan to sell homes directly to middle-income families. The sandwich class refers to people who earn too much to be eligible for public housing and too little to make buying their own private home affordable.

On Thursday, Housing Authority member Michael Choi Ngai-min joined the call by suggesting that the rental option of My Home be dropped to ease market panic.

He said people were still rushing to buy homes in the secondary market, despite their high prices. For example, 13 Tai Koo Shing flats were sold within 24 hours on Monday, and the square-foot-price rose to more than the record high of HK$11,000.

The Centaline City Leading Index has risen to a historical high, reaching 104.85 points based on transactions from August 6 and August 12, up 1.47 per cent from the previous week. This was 4 per cent up from the 1997 peak, which was followed by a bubble.