C.Y. Leung refuses to shelve HOS flat sale, citing shortage

PUBLISHED : Tuesday, 06 November, 2012, 5:16pm
UPDATED : Tuesday, 06 November, 2012, 5:43pm

The government will go ahead with a plan to sell 5,000 second-hand subsidised flats to middle-class buyers, Chief Executive Leung Chun-ying said on Tuesday.

Leung was speaking after legislators on Monday passed a non-binding motion calling on the government to suspend the new measure, which he announced in July. The motion passed by a 9-5 vote in a housing panel meeting.

Under Leung’s plan, 5,000 “white-form” applicants for Home Ownership Scheme flats – prospective buyers of a subsidised unit currently living in a private flat and who did not receive a housing subsidy – will be able to buy second-hand HOS flats without paying a land premium, from next year.

Market analysts say the prices of second-hand HOS flats have jumped as much as 10 per cent since the new policy’s announcement, because applicants now face keener competition for flats.

Dismissing the calls to shelve the plan, Leung said on Tuesday that the recent rises in flat prices were due to a general shortage of housing, not due to his new policy.

His plan, he said, would speed up transactions in the secondary property market, which would in turn increase the flat supply.

The scheme was an essential part of his multi-pronged approach to solving the city’s housing problems, Leung said.

“If we shelve this plan, and if at the same time other plans to increase supply are delayed – such as the development plan for northeastern New Territories – we will only see a longer queue for public housing, higher flat prices and rents, and more cage homes,” he said.