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SCMP Reporter

Bargain hunters who plan to buy one of the 16,000 Housing Authority apartments left vacant by the suspension of the Home Ownership Scheme (HOS) may have to dig deep into their pockets to restore the flats to a decent state.

Some of the units may be 10 years old  by the time they are put on the market, according to the proposed schedule of sale, voiding the 10-year structural guarantee offered by the authority.

Some property surveyors estimate that buyers may have to pay up to $100,000 for maintenance and refurbishment work, although the authority has promised a $28 million project to renovate the units before selling them.

Pang Shui-kee, managing director of SK Pang Surveyors,  said $28 million was not enough.

'It translates to about $1,700 per unit. That is barely enough to clean the floors or change old water pipes,' Mr Pang said.

He said that unoccupied flats aged quicker than occupied ones because of the lack of regular maintenance.

'Water pipes might get rusty or blocked. Fine cracks could also develop in the walls and floors. And bear in mind this is subsidised housing and the quality of materials used and fittings in general are not as good as those used in private developments,' Mr Pang said.

There are 16,595 units in 10 estates under the now-defunct  HOS. The units have been vacant since a 2002 sales ban imposed by the government to shore up the private property market.

Sales will resume in early 2007 and the flats will be disposed of in stages over three years.

About 80 per cent of the units will be sold to tenants in public housing estates; the rest will be sold to lower-income families renting private flats, subject to their monthly incomes and assets.

The authority will also lift the resale restrictions previously imposed on HOS projects and allow buyers to resell their units on the market when they want. But the preferential arrangement in which the authority will guarantee to buy back a unit in case the owner cannot afford the monthly mortgage instalments will be removed.

Prices of the units will be fixed when they are put on sale, according to the authority.

The usual practice is that flats under the HOS are sold at about 70 per cent of their market value.

The authority also said it would take into account  how much prospective buyers could afford to pay.

Aiming to sell up to 6,000 units a year, the authority estimates that it can make $20 billion from the sales.

It said it would be responsible for the structural maintenance of buildings for 10 years from the date of the completion of the flats.

Most of the apartments were completed in 2001 and 2002.

For example, when the 1,480 units at Yau Mei Court, in Yau Tong,  are sold in 2009 or 2010, as scheduled, they will already be seven or eight years old.

And about 1,000 units in Tin Fu Court  and Tin Chung Court, in Tin Shui Wai,  were completed in 1999 but had to be reinforced after the pilings in some blocks in the Tin Shui Wai estates were found to be substandard.

When the 640 unsold units in Tin Chung Court are sold in 2009 or 2010 they will also be 10 years old, although the authority only completed the reinforcement of the pilings in 2003.

Housing Authority member Wong Kwun  said it was unfair to buyers.

'In some cases, when a buyer moves in, the 10-year-old structural guarantee period might be about to expire. The buyer would have little protection at all,' Mr Wong said.

Fellow authority member and legislator Fred Li  urged the authority to consider offering a 10-year structural guarantee from the date of sale.

Authority members are expected to finalise the details of the sales by early next year.

Private developers and market watchers do not expect the sales to have a significant adverse impact on the private property market.

But authority member Shih Wing-ching,  chairman of property consultancy Centaline Group, criticised the plan to allow public tenants to buy the units, saying that it was 'a waste of taxpayers' money'.

'The [potential] tenants have no housing problem. They are already living in subsidised low-rent housing,' Mr Shih said.

'If they want to own homes, they should pay [for the homes] themselves. Why does the authority think it has the duty to help them buy flats?'

Launched in 1978, the HOS allowed low-income families to buy their own homes  from the Housing Authority at a substantial discount to market prices.



Bargain hunters told to beware of vacant HOS flats