The Government-imposed cap on sales of subsidised housing will do little to help the property market this year in the face of abundant private supply, according to analysts.
Acting Director of Housing Marco Wu Moon-hoi said last week the supply of new flats under the Home Ownership Scheme (HOS) would not exceed 6,000 a year over the next five years.
The figure was lower than expected because Chief Secretary for Administration Donald Tsang Yam-kuen in September had announced a cap of 9,000 a year until 2005-06.
DBS Vickers Securities said there would be little impact from this reduction in supply. In a report, the securities house said the housing scheme had been a convenient 'scapegoat' for sluggish residential prices.
However, the fact that residential prices had continued to fall despite the moratorium on HOS sales showed there was little correlation between the HOS supply and private residential prices, it said.
HSBC Securities analyst Derek Cheung said the change in housing policy only created more confusion.
He said this kind of policy change should not be made in an interview with only one television station because people would not know about the change if they did not watch that particular television programme.