Sandwich loan plan criticised

PUBLISHED : Wednesday, 08 September, 1993, 12:00am
UPDATED : Wednesday, 08 September, 1993, 12:00am

THE Government was last night urged to set up an independent study into why there had been such a poor response to the sandwich class housing scheme.

Property analysts said the cheap loans idea, which attracted only a fraction of the 40,000 eligible applicants, was only a drop in the ocean measure to deal with the problem.

They called for a severe overhaul of the scheme and a long-term strategy to provide enough affordable homes to satisfy the demand.

Despite a last-minute rush to beat the deadline, only 3,435 people applied for the first phase of loans - eight per cent of the total number of eligible applicants.

Wong Lai-chun, director of estate management, claimed the figures proved the Government's approach worked well.

She said the scheme was more than three times oversubscribed and the decision to provide only 1,000 places in the first phase had been vindicated.

But Michael Choi Ngai-min, president of the Hong Kong Society of Real Estate Agents, called for immediate action.

He said an independent poll should be commissioned to find out why there was such a poor response.

''The promotion and publicity was certainly bad and a lot of people may not have known when it started or finished,'' he said.

''And the price rises in the market over recent months have undoubtedly put people off.'' Peter Churchouse, head of research at Morgan Stanley, said: ''In the short term, they should probably continue with it.

''But it is clear evidence that, in the medium and long term, they have to address the cause and not the symptoms.

''That means releasing more land to cope with the lack of supply.'' David Faulkner, a partner at Brooke Hillier Parker, called for a thorough review of the system before the next phase was implemented.

The $2 billion plan will allow 4,000 families to borrow $500,000 or 20 per cent of the home's value at an interest rate of two per cent a year.