Public housing tenants are to be offered huge discounts and preferential mortgage rates to buy their flats.
Market prices will be slashed by up to 88 per cent to make the new Tenants Purchase Scheme a success, the Housing Authority said yesterday after endorsing the project which took seven years to come to fruition.
Banks will provide mortgages of up to 95 per cent, while any structural problems with the flats will be fixed free for seven years. The homes can be sold back to the authority after two years or on the open market after five years.
The first batch of 25,000 flats will be put up for sale in January and is expected to raise $4.6 billion net profit for the authority. Popularity of the first wave will influence the number of flats on offer in future and the sales' frequency.
Half of the population lives in public housing.
Authority members yesterday generally agreed that the scheme was designed to give tenants flexibility. Prices are attractive enough to help boost home ownership towards the 70 per cent by 2007 pledged by Tung Chee-hwa.
But the Hong Kong People's Council on Public Housing Policy said the plan would cause years of delays for 150,000 applicants waiting for public rental flats.
