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Hong Kong property

Trial scheme allows 15 young buyers to snap up Hong Kong flats with ‘super low’ down payments

More than 1,200 applied for flats at The Parkville in Tuen Mun under a programme that aims to give youths a chance to get into red-hot market

PUBLISHED : Sunday, 11 February, 2018, 7:18pm
UPDATED : Sunday, 11 February, 2018, 7:18pm

Young first-time homebuyers in Hong Kong flocked to snap up more than a dozen flats in a luxury development with “super low” down payments.

The scheme, launched by New World Development, was the first of its kind for private developers after the chief executive announced plans last year to help young families get on the property ladder. 

There were more than 1,200 applicants vying for the 15 flats at The Parkville residential development in Tuen Mun. The 15 flats were reserved as a trial for the project out of the 100-unit development. 

Only those aged between 25 and 35, who were permanent residents and had never owned property in Hong Kong, were eligible for the scheme, called the NewGen First Home Program

Prices at the 27-storey tower ranged from HK$5.87 million (US$752, 500) to HK$8.32 million for the 15 flats, with sizes from 422 square feet to 575 sq ft. Prices for other flats in the development sold for between HK$4.52 million and HK$12.93 million, according to previous transactions recorded by Centaline Property Agency.

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About 30 eligible buyers were picked from a ballot and 80 per cent of them showed up on Sunday morning. All 15 flats were all sold by noon.

Frankie Fu, 31, one of the successful buyers of a three-bedroom flat, said he was attracted by the down payment, which went as low as 7.5 per cent of the purchase price. For example, an eligible buyer was only required to hand over a HK$558,000 down payment for a HK$7.44 million flat. 

“I think projects like these really cater to young people like us who have trouble with saving up for the down payment. That’s our biggest hurdle,” Fu said. 

“Sometimes the rent you pay is even more than what you would pay for the monthly mortgage, so if you can sort out the down payment, then it’s all okay.”  

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Fu forked out more than HK$600,000 as the down payment for the HK$8 million flat. 

Hong Kong has consistently topped surveys of the world’s most expensive housing markets for several years now. Adrian Cheng Chi-kong, executive vice-chairman of New World Development, said the “super-low” initial down payment was aimed at allowing aspiring homeowners to take an easier first step onto Hong Kong’s notoriously steep property ladder. 

At present, homebuyers can get a loan of 80 per cent of the property’s value under the Hong Kong Mortgage Insurance scheme for flats priced between HK$4 million and HK$6 million. That means buyers are required to put down an initial deposit of HK$1 million for homes costing HK$5 million. 

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Another buyer, Matthew Lai, 31, said he has been saving for six years after he graduated from university. 

“It’s helped me get on the property ladder earlier than I thought I would be able to,” Lai said. 

Lai, who works in the finance sector, also said the 40-year mortgage payment period also lightened his burden.

Fu and other homebuyers are many of the young, middle-income families who earn too much to enter public housing, but too little to afford owning a piece of property in Hong Kong.

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In response, Chief Executive Carrie Lam Cheng Yuet-ngor was planning to launch a pilot project with 1,000 flats on Anderson Road, Kwun Tong by the end of this year.

Under the Starter Homes Scheme, buyers would be eligible if they were first-time homebuyers and the monthly income ranged from HK$26,000 to HK$34,000 for single people and from HK$52,000 to HK$68,000 for households of at least two.  

The government was expected to announce more details of the scheme in the middle of the year.