Hong Kong housing

Hong Kong buyers snap up deals on discounted public housing flats

Government body says price tags were set at 40 per cent discount to market rates in July, but figure is now 45 per cent as property prices have risen

PUBLISHED : Thursday, 12 January, 2017, 2:24pm
UPDATED : Friday, 13 January, 2017, 10:48am

Two-thirds of heavily subsidised flats under a government pilot scheme were sold on its first day of sales on Thursday after prices were lowered.

Some 65 public housing tenants flocked to the Housing Authority’s flat selection centre in Lok Fu to grab a bargain deal on the 80 flats in San Po Kong in east Kowloon that were up for grabs on Thursday.

Fifty-eight flats were sold, out of 80 applicants who were chosen through an open ballot to make their purchase at the centre on Thursday.

The flats, which cost between HK$940,000 and HK$2.98 million, were set at a 40 per cent discount based on last July’s market price.

Stanley Wong Yuen-fai, chairman of the authority’s subsidised housing committee, said the actual discount rate now is higher in comparison to current property prices.

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“Property prices had risen by 10 per cent compared with the price [that we based the selling price on] in July last year, so the actual discount would work out to be about 45 per cent,” Wong said.

Public housing tenants would still pay between HK$940,000 and HK$2.98 million for a flat, but if they decide to resell the flats to other public housing residents in the future, they would have to pay a bigger land premium of 45 per cent, instead of the original 40 per cent.

The Green Form Subsidised Home Ownership Pilot Scheme, initiated by Chief Executive Leung Chun-ying in his 2015 policy address, aimed to vacate more public housing flats and reduce waiting periods, which had exceeded 4 1/2 years.

Alice Yu Ming-wai, 33, a proud new owner of a 492 sq ft flat, was overjoyed after signing her sales contract.

“I was looking at second-hand flats in the private sector for the past two to three years, but I would have to fork out HK$3 million for flats that were even smaller than the public flat that I’m living in,” Yu, a civil servant, said.

“I would have to pay around HK$10,000 for the mortgage every month [for the new flat], but I think our family can sacrifice going on one fewer holiday a year to save up for that,” she said.

Another new owner, Lam Chun-kit, 34, said that his new purchase meant that his whole family would be able to live together under one roof.

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“My wife and I had to move out of a public housing flat because we were earning more than the income limits, leaving my elderly mother-in-law on her own. Now we won’t have to worry [about there being no one around] to take care of her if accidents happen,” Lam said.

The Housing Authority received 16,200 applications for the flats, whose sizes ranged between 192 sq ft and 494 sq ft. Flat owners will be able to move in after construction is completed by June.

“I’m quite optimistic about the sales performance,” Wong of the Housing Authority said. “If [public housing residents] believe property prices will be stable or continue to go up, they will be more aggressive in buying.”

A total of 857 flats in San Po Kong are up for grabs in the scheme.