Leung Chun-ying

C.Y. stands by discounts on HOS flat resales

Chief executive rejects lawmakers' call to scrap plan to let private-sector tenants buy used HOS flats at a discount, as public-sector tenants do

PUBLISHED : Wednesday, 07 November, 2012, 12:00am
UPDATED : Wednesday, 07 November, 2012, 4:23am


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Leung Chun-ying dismissed a call by lawmakers to abolish a housing scheme he pledged to deliver during his election campaign, and denied it had fuelled property price increases.

The chief executive was reacting to a non-binding motion passed by Legco's housing panel on Monday calling for the plan - aimed at helping middle-income families buy used flats under the subsidised Home Ownership Scheme (HOS) - to be scrapped.

"Theories that say the measure has encouraged speculation in the HOS market are unfounded," he said. "Home prices and rents have risen for some time ... this is a reflection of a shortage in a typical housing market. I don't want to shelve the plan."

He said without it, "there will only be more and more people queuing up for public rental housing and more people remaining in caged homes and subdivided flats".

Under the scheme, which was announced in July, up to 5,000 eligible families renting private flats will be selected in a ballot to buy second-hand HOS flats at a discount. The discount is currently open only to tenants in public housing.

It is intended as an interim measure before new HOS flats are completed from 2016, yielding 5,000 homes a year.

Although real estate agents said the scheme had pushed up prices in the HOS market, an examination of transactions by the Post showed that in some projects, price growth was in line with the general market trend and had not outpaced it.

In Tin Shui Wai's Tin Shing Court, an HOS project, the per-sq-ft price rose 17.4 per cent from July to October, above the 14.9 per cent growth in a nearby private project, Kingswood Villa. But in Aldrich Garden in Shau Kei Wan, prices fell 6.2 per cent in the same period, while prices on the nearby Taikoo Shing private estate rose 30.9 per cent.

Housing Authority member Michael Choi Ngai-min said HOS flats remained cheaper than private flats. Citing the authority's figures, he said 39 per cent of the 984 transactions in the HOS market in the past six months were for less than HK$2 million and flats under HK$3 million accounted for another 39 per cent.

Choi expected the new 15 per cent stamp duty on non-local and corporate buyers would help cool the market. "By the time successful applicants under the scheme make their purchases in May next year, prices should be lower than today," he said.