Scheme to boost home ownership may face axe

Allowing middle-income families to buy publicly subsidised flats has driven prices up, say critics

PUBLISHED : Monday, 01 July, 2013, 12:00am
UPDATED : Wednesday, 26 October, 2016, 2:38pm

The future of a new policy that aims to help middle-income families buy government-subsidised home ownership scheme (HOS) flats in the secondary market has been thrown into doubt, with the housing minister hinting that it may be scrapped as early as year's end.

Secretary for Housing and Transport Professor Anthony Cheung Bing-leung yesterday said the government would review the effectiveness of the policy before deciding whether or not to abolish it.

His remarks came amid criticism that the scheme has fuelled an increase in home prices.

In a TVB interview yesterday, Cheung said: "It is possible, and I will not rule out that the new scheme may be one of the many factors [that have contributed to] the change in the market.

"But it is an overstatement to say the scheme should be blamed for the market change, or that it is solely due to the scheme's introduction, which could only increase demand by several thousand [homes]."

But he said: "We will review the scheme to determine the effectiveness of the 5,000 quota set for the first year before we decide if it should continue."

The scheme, one of Chief Executive Leung Chun-ying's main election platforms, evolved from the HOS secondary market scheme, which was introduced in 1997 to allow owners to sell their flats without having to pay a land premium to the government first. It used to be offered to public tenants only.

Under the revised scheme started this year, middle-income home-hunters who are renting private flats are also allowed to participate. It is estimated that some 270,000 families could be eligible, but an annual quota of 5,000 has been set. Some 66,000 applications were received by the Housing Authority for the first year of the scheme.

Opposition legislators have criticised the scheme, saying it will do nothing to ease the shortage of housing and will stoke home price inflation.

There have been reports that the prices of HOS flats in the secondary market have soared by as much as 20 per cent in the past two months. Last month an HOS unit in Quarry Bay was reportedly sold for $4.51 million - about $7,618 a square foot, based on saleable area. Reports have also surfaced saying prices of secondary market HOS flats have almost reached the same level as those of secondary market private units.