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SCMP Reporter

SANDWICH class families who get a $500,000 Government loan may still be unable to afford a down payment on a home.

  Rocketing flat prices have forced many of Hongkong's middle-income families out of the home ownership market.

  But recent sharp rises could mean even the few lucky candidates in the scheme designed to tackle the territory's house price crisis losing out.

  Meeting Point chairman Anthony Cheung Bing-leung repeated a call for the $2-billion plan to be withdrawn.

  And property experts said it was possible people who qualified for the loan may hand it back because prices were still out of their range.

  Mr Cheung said: ''The current scheme of giving loans to use in the private property market might create the effect of increasing demand.

  ''We are a bit afraid that might force prices up further and make housing even less affordable.''   He agreed the situation might arise where people were refused the loans, and added: ''We don't think this is the best way to use the money. There are more constructive ways of doing it.''   The Government is offering loans of up to $500,000, or 20 per cent of a flat's value, to help people meet the 30 per cent deposit required since the 70 per cent mortgage lending ceiling was introduced last year.

  About 1,000 families with at least three members earning between $20,001 and $40,000 will qualify in the first year.

  The majority (about another 3,000 families), those with incomes below $30,000, will be picked after a ballot later this year.

  According to property consultants Brooke Hillier Parker (BHP), prices in the range of flats liable to interest sandwich-class buyers have risen by an average of 20 per cent since January - to about the same levels as this time last year.

  For example, at Whampoa Gardens, prices have jumped from $3,770 to $4,075 per square foot, and are still rising.

   Maggie Brooke, a partner at BHP, said: ''If you take a 650-sq ft flat, it is not being over the top to price it at $2,650,000.

   ''A 30 per cent deposit would be $795,000. That means the family still have to raise nearly $300,000 themselves.

  ''People who thought the Government was going to foot their down payment and [they would] be able to move into a big flat will be disappointed. They have to be realistic.''   Mr Cheung said that families would not want to move into small 450 sq ft flats.

  ''They will be looking for something bigger.''   He believed breakthroughs in the Sino-British talks on the new airport or Hongkong's political future could push prices up further.

  The entrance of the sandwich class families who get loans could also increase demand in the market.

  Meeting Point has urged the Government to divert resources into building home ownership scheme homes or special flats for the sandwich class.

  Families can expect 30 per cent off the market price for flats up to 861 sq ft when two-and three-bedroom units go on sale in 1995.

  The Government's long-term plan to provide affordable housing hopes to bring 5,000 new flats on stream each year.

  The Deputy Secretary for Planning, Environment and Lands, Canice Mak Chun-fong, said the loan scheme would go ahead.

  ''I think each individual family will be able to take account of their own financial capabilities,'' he said.

  ''I can't predict the exact response, but I expect the number of applications to mean balloting will be used for the first batch.''    Property firm Colliers Jardine has reported booming price rises, especially in the luxury flat sector.

  Rental levels have also shot up, fuelled by the growing number of expatriates moving into the territory.

  The numbers have risen by more than eight per cent this year. The trend is expected to continue.

  Cathy Costin, senior residential leasing manager, said the number of foreign firms was growing.

  ''There is a large influx of expatriates requiring superior accommodation.'' 



Rising prices threaten to nullify loans