16,600 flats to be disposed of, but analysts do not foresee any significant impact on the property market
Industry players have welcomed as timely the Housing Authority's decision to sell 16,600 Home Ownership Scheme (HOS) flats over the next three years.
They dismissed fears that the sale of the subsidised flats, frozen in 2002 amid a property slump, would have significant impact on the private market. But one analyst warned that the jump in supply of lower-priced flats could have a short-term impact on the secondary market.
According to the authority, which announced details of its plans yesterday, it could raise $20 billion over the next three years by selling all of its remaining 16,600 units, mostly in Island East and Kowloon East. Two sales will be held each year, with 6,000 sold in the first year, 6,000 in the second, and the remainder in the third.
Some estate agents said the sales would not have much impact on the private housing market, but Eddie Hui Chi-man, of the Hong Kong Polytechnic University's department of building and real estate, warned of a possible short-term impact.
'The government is dumping 6,000 units on the market and these units will be sold at a discount,' Professor Hui said. 'That will pose some direct competition, especially in the secondary market.'
He agreed that the sale of HOS flats could ease the authority's financial burden, 'but if this could be done with more flexibility to cope with the changing market situation, that would be better'.
