Demand for small flats is expected to soar by the end of the year as more housing loans are approved under different government schemes. Property agents said more than half the flat stock was under 700 square feet and the granting of loans to low and middle-income earners would boost sales. The forecast came as the Housing Department prepared to open its expanded Home Purchase Loan Scheme for application today. The scheme will help 10,000 eligible buyers purchase homes in the private market. Seventy per cent of the quota will go to public housing residents and the rest to those renting homes in private properties. Successful applicants from public housing can choose an interest-free loan of $800,000 repayable over 13 years, or $600,000 repayable over 20 years. Those in private properties can opt for between $500,000 repayable over 14 years, or $400,000 over 20 years. They must activate the loan within four months. The Housing Department expected the scheme to receive a strong response. More than 2,000 telephone inquiries have been received over the past week. Hong Kong Property Services managing director Michael Choi Ngai-min believed the scheme, with the Home Starter Loan Scheme under the Housing Society, would generate sales among small flats by the end of this year. 'Since procedures of granting these loans take a few months to complete, transactions are expected to take place in the fourth season and peak by the end of this year and early next year,' said Mr Choi. The loans would boost sales among flats sized from 500 sq ft to 900 sq ft in the New Territories, or 500 sq ft to 700 sq ft in the urban areas, he said.