No rush for bargain flats on Lantau with sky-high management fees

Majority of applicants given priority to buy cheap public flats opt against picking a home on first day - but some just can't wait to live on Lantau

PUBLISHED : Thursday, 28 August, 2014, 4:56am
UPDATED : Thursday, 28 August, 2014, 11:24am

Only about a third of applicants given top priority to buy bargain government flats in Tai O showed up to choose a home on the first day of sales after it emerged buyers would face management fees higher than those at some plush private developments.

Of 45 potential buyers invited to pick one of the 85 flats at Tin Lee Court on the first day of sales - and one remaining flat at Tin Chung Court, Tin Shui Wai - just 16 showed up.

Of them, 13 chose a flat and just six paid the deposit - and one of those was for the Tin Chung Court property.

The other 32 would-be buyers can exercise their right to buy until all the flats are sold.

The flats are being offered under the government's Home Ownership Scheme, intended for people and families too poor to buy privately but too well off for public housing.

Some 12,500 applicants joined a ballot to buy the flats, with families that had at least one elderly member given priority in choosing homes.

The 19-year-old development on Lantau has been used for public rental housing, but has struggled to attract tenants due to its remote location. The Housing Authority opted to sell the flats to save on maintenance, at prices of HK$641,100 to HK$897,300 for homes of 478 to 482 sq ft.

But enthusiasm has cooled since the authority announced last month that management fees would be between HK$2,043 and HK$2,073 a month due to the relatively small number of flats sharing the costs.

At HK$4.20 per square foot, the fee is even higher than the HK$3 per square foot at the luxury Bel-Air estate in Pok Fu Lam.

Tung Yuk-ying, 50, was first in line to buy, putting the deposit down on a HK$880,000 flat to share with his mother and wife. Tung, whose family lives in a 300 sq ft public rental flat in Sha Tin, said he was surprised to learn of the management fee, but decided to go ahead as the location and price were still attractive.

"I am very glad… I have applied for HOS flats four or five times in the past and never got a chance, and I can't afford to buy a flat in the private market," said Tung, who travels frequently for work and likes the fact he will be within easy reach of the airport.

Gerard Lianto, 60, said the price made the deal attractive, despite the prospect of a lengthy commute to work in Wan Chai.

"The management fee is indeed high, but the price is very low. Flats outside costs millions of dollars," said Lianto, who rents a private flat in Wan Chai which he shares with his wife and son.

Some analysts predicted that the flats would end up in the hands of investors or people who wanted a weekend getaway.

But many retired and soon-to-retire buyers said they liked the quiet environment of the Lantau fishing village.

"Surrounded by green mountains, picturesque water, singing birds and fragrant flowers, what a paradise 'Hong Kong's Venice' is!" Lung Sze-keung, 66, a retiree, said happily after choosing a near-HK$900,000 flat.

A few prospective owners who met at the sales office discussed ways to reduce management charges. They said they wanted to set up an owners' corporation and take over management at the end of the authority's contract with whichever company won the tender.