Intervention calls meet mixed views
Proposals by legislator Abraham Shek Lai-him for more government measures to rejuvenate the lacklustre residential market are meeting mixed views from the property industry.
Mr Shek, who represents the real-estate and construction sectors, suggested the Government cut subsidised housing supply and reduce interest-rate charges on loans to help people buy homes.
Shun Tak Holdings managing director Pansy Ho Chiu-king said the company, as a member of the Real Estate Developers Association, supported the proposals in principle and association members would continue to discuss details.
She said a cut in interest rates and the supply of subsidised housing would have a positive impact on the property market.
Shun Tak would welcome a government move to put more well-located sites up for sale because the group was interested in quality residential developments but most of the land scheduled for sale this year was broken into small lots, she said.
However, SK Pang Surveyors managing director Pang Shiu-kee said the proposal to reduce subsidised housing supply was not new. A cut in subsidised housing production had been implemented during the past few years, but there was still no significant impact on the private housing market.
'The Government can do little more to rejuvenate the property market . . . it all depends on future economic development,' he said.
Mr Shek said more government measures were needed to encourage buyer interest in the sluggish market. He suggested the Government reduce interest rates charged on Home Starter Loans in line with a fall in mortgage lending rates this year.
He said the attraction of subsidising loans was flagging as mortgage rates offered by most banks were below 5 per cent, narrowing the gap with government loans which were 2 per cent to 3.5 per cent.
Mr Shek said the Government could even offer zero interest rates for subsidised loans for the first few years when first-time buyers bought properties.
Another recommendation was for the Government to further cut supply of subsidised flats under the Home Ownership Scheme and the Private Sector Participation Scheme from about 20,000 to fewer than 10,000 units per year.
Mr Shek suggested re-allocating land originally planned for subsidised flats in good locations for sale by auction or tender for private developments.
The Government could use revenues generated from land sales to subsidise public housing production or increase the quota of home loans, he said.
Critics said it was not appropriate for the Government to intervene further in the property market because it already had done too much.
They also questioned the need to use taxpayer money to subsidise home-buyers.
Mr Pang said home-buyer interest could not be bolstered merely by reducing government loan interest rates, although he believed property prices had bottomed and the chance for further downside was limited.
The Government already had reduced the amount of residential land for sale in this year's land-disposal programme.
This was in addition to the reduction in construction of subsidised housing by the Housing Authority.
