As many as 270,000 home buyers seeking bargains will be able to vie for up to 5,000 used government-subsidised units from next January under a revised home ownership scheme.
The Housing Authority's subsidised housing committee yesterday endorsed a proposal to allow families with monthly income up to HK$40,000 and assets worth up to HK$830,000 to be eligible to apply to buy the flats.
The income and assets limits for individual applicants will stand at HK$20,000 a month and HK$415,000 respectively.
The authority will provide successful applicants with a mortgage default guarantee of up to 90 per cent of the flat price for 30 years. To stop overseas speculators, applicants must have lived in Hong Kong for at least seven years and their stay must not be subject to conditions.
The authority estimates about 270,000 families renting private flats could be eligible.
Some critics say the authority is overly generous in subsidising high earners while the authority says it has taken into account the prevailing property market.
Committee chairman Stanley Wong Yuen-fai admitted the lifting of income and assets limits could sharpen competition. But he said: "Under a ballot system, every applicant will still have equal chance to buy."
Committee member Michael Choi Ngai-min, who also sits on the long-term housing strategy steering committee, added: "Given the present flat prices, we gather that even those with HK$40,000 a month may not be able to afford to buy private flats. So, this group of people should also be assisted."
Usually, income limits for HOS flats take into account the prevailing private property prices. In the late 1990s, the income limit was once set at HK$33,000 a month. It was adjusted to HK$20,000 in 2002.
The scheme evolved from the HOS secondary market scheme, which was introduced in 1997 to allow owners to sell their flats without having to pay land premium to the government first.
Midland Holdings chief analyst Buggle Lau said: "Families with HK$40,000 monthly income should be able to afford used units in the private market. It is debatable whether taxpayers' money should be used to help such better-off families to buy government flats.
"From another point of view, I would doubt if second-hand HOS flats, which are subject to lots of resale restrictions, would be popular with these families."