The income limit for home ownership flat applicants was cut by 20 per cent yesterday and could be reduced again if private property prices continue to fall, Housing Authority officials said. Walter Chan Kar-lok, chairman of the Home Ownership Committee, said: 'The cut of the monthly household income to $25,000 from $31,000 was already mild as it should be down 30 per cent to $22,000 based on a long-established mechanism to calculate the limits.' The new limit will be implemented in the next phase of Home Ownership flat sales in April. The asset limit for families will also be reduced to $600,000 from $700,000. For single applicants, the income and asset ceilings will be lowered to $12,500 from $15,500, and $300,000 from $350,000. The cut - first made public last month - was formalised yesterday when authority members endorsed the move at their annual review. Wong Kwun, a member of the committee, who argued for a freeze, said the authority implemented the cut to boost the private residential market. He said property developers would try to lure buyers by marking up the prices of private flats to create an illusion that the market had started to recover. 'The authority no longer works for the interests of the poor as it did,' Mr Wong said. 'It now works for the interests of the property developers and residential estate agencies.' The authority defended the move saying it was necessary to make sure that limited housing resources went to the most needy. Mr Chan said families earning $25,000 a month would have no difficulty in buying a private flat and they could apply for a Home-Starter Loan scheme. 'We withheld the adjustment last year simply because the private market showed a sudden boom at the time of review. Therefore we held out to observe for a bit longer,' he said. 'We don't rule out a further downward adjustment next year if the private market prices keep falling and inflation doesn't improve.' Authority chairman Cheng Hon-kwan said the cut was not to boost the private property market. 'There has not been an adjustment in the past two years. Therefore the adjustment appears to be a big one this time,' he said. About 200 people from more than 10 groups and political parties launched a demonstration outside the Housing Authority Headquarters in Ho Man Tin, Kowloon. Thirty members of the Grassroots Development Centre slept there overnight.