Subsidised flat sales 'no longer necessary'
Housing Authority members yesterday debated whether home-ownership flats should be scrapped as a result of the slump in the property market.
Speaking at the authority's annual meeting, some members suggested cutting the supply because the prices of private flats had dropped to levels close to that of the government-subsidised flats.
Member Iris Tam Siu-yin said: 'The Home Ownership Scheme has fulfilled its role. It is high time we explored the possibility of its abolition for the healthy development of the property market.'
With recent interest-rate cuts, the public's ability to buy private flats had reached a 10-year high, she said, adding that the Government would be able to keep price levels affordable by long-term planning and land-sale controls.
Other members opposed a complete halt to the scheme while agreeing that the supply should be temporarily cut before private property prices rose again.
Michael Choi Ngai-min said: 'I think today home-ownership flats are not very useful. But it doesn't mean they won't be useful, say in three, five or seven years because property prices fluctuate. I think the supply should be flexible depending on the general public's ability to afford private flats.'
Ho Sai-chu pointed out that profit from sales of home-ownership flats was weakening as their prices had dropped while their quality kept improving as spending on construction rose.
Fong Ching said cutting home-ownership sales, which was its main source of finance, would hurt the authority's operations.
Wong Kwun said he disagreed with cutting home-ownership flat sales and increasing home purchase loans to prop up the property market or stimulate demand.
The scheme 'works to adjust market prices and prevent a monopoly by private developers', he said.
After the meeting, authority chairman Cheng Hon-kwan said members' suggestions would be discussed further.
The secretary-general of the Real Estate Developers' Association, Louis Loong Hon-biu, said an increasing number of the authority's members realised the Government should re-examine its role as a non-commercial developer of subsidised flats.
He said scrapping home-ownership flats would enable private developers to bid for prime land and lead to a fairer use of public resources, including land and taxpayers' money.
Fewer than 19,000 applications for 6,307 flats were received in the latest home-ownership flat sales, down at least 20 per cent from the 25,659 applications submitted for the previous launch in January.
