Hundreds of homebuyers seeking bargains waited in line at the Housing Authority yesterday, to get application forms for 5,000 used government-subsidised flats put out under a revised Home Ownership Scheme (HOS).
Among the roughly 600 prospective buyers who turned up at the authority's customer service centre in Lok Fu in the morning, some came to get the forms for themselves and some for their adult children.
"Because we don't have enough space to live together, I am looking for a [bigger] place with a reasonable price," catering worker Wilson Chan, 46, said. His family of six lives in a 750 sq ft flat in Whampoa.
The authority estimates some 270,000 families may be eligible for the subsidy scheme, which is open to households with monthly incomes up to HK$40,000 and assets worth up to HK$830,000. The caps for single buyers are exactly half those figures.
About 9,200 forms were given out at Lok Fu by 5pm yesterday.
Of the 5,000 flats available, 4,500 are set aside for family buyers and 500 for singles. They are eligible to apply for a loan of up to 90 per cent of the purchase price, for up to 25 years, at the best available bank interest rate minus 0.5 per cent.
To prevent overseas speculators from taking advantage, applicants must have lived in Hong Kong for at least seven years and their residency must not be subject to conditions.
Applications will be accepted until January 18, after which the names will be selected in a draw and announced by mid-May.
Many of those queuing yesterday compared the HOS offer to "My Home Purchase Plan", a programme under the Housing Society that has begun selling subsidised flats at Greenview Villa in Tsing Yi.
"HOS flats are more flexible, because I can choose the location", whereas Greenview was in Tsing Yi, said Jit Lau, a logistics worker who has been renting a flat with his wife in Wong Tai Sin for several years.
He said the family income cap of HK$40,000 was too low and should be raised to HK$50,000.
Some critics, however, say the Housing Authority is overly generous in subsidising high earners, while the authority says it has taken into account the prevailing property market.
With construction costs on the rise and plans to build thousands of subsidised flats, the authority expects its cash and investment balance to decrease every year over the next five years.
In its revised budget, presented yesterday, the authority projects the balance to fall from HK$69 billion in the 2011-12 financial year to HK$46 billion in 2016-17, the lowest since a record low of HK$15 billion in 2004-05.
The head of a group representing public housing tenants and shopkeepers warned that rocketing construction costs could trim the balance further.
Wong Kwun, president of the Federation of Public Housing Estates and a former member of the authority, advised it to seek extra government cash rather than sell off its assets should a shortfall arise. The authority should be alert for cash flow problems and plan ahead for any funds needed from the government, he said.
It should not repeat its mistake of selling retail facilities and car park spaces to The Link Reit in 2005, which resulted in high rents and retail prices, Wong said.
Raymond So Wai-man, chairman of the authority's finance committee, said: "We are fully aware of the challenges ahead. The Housing Authority will remain vigilant and continue to closely monitor the possible financial impact generated by changes in the public housing construction programme."
He said there would be enough money over the next five years to fund its maintenance programmes and put out about 15,000 public rental flats a year on average, and to keep the average waiting time at about three years.