My Take

After a decade of neglect, buying a subsidised flat is a no-brainer

Chief Executive Leung Chun-ying has sensibly revived the Home Ownership Scheme, and certainly not before time given the greed of our developers

PUBLISHED : Wednesday, 20 July, 2016, 12:35am
UPDATED : Wednesday, 20 July, 2016, 9:14pm

Whatever you think about Leung Chun-ying, he is the chief executive who sensibly revived the Home Ownership Scheme for subsidised flats from the get-go in 2012. Not only that, but he has made HOS an integral part of the supply of housing until 2025. Of the 480,000 units projected to be completed in the next 10 years, 90,000 will be subsidised.

You may think the revival of the HOS was a no-brainer given the social discontent, especially among the sandwich and middle classes, about unaffordable home prices. But it should have been a no-brainer for his predecessor Donald Tsang Yam-kuen, who was instead content with the trickle-down effect of the housing bubble and its illusory wealth impact.

Prices set for new Home Ownership Scheme flats in Hong Kong

Now, whenever a new batch of HOS flats hit the market, they are snapped up. The latest 2,657 HOS units released for sale in Sha Tin and Tin Shui Wai will sell like hot cakes, too. Newspaper reports love to bang on about how the overall property market may plunge further and that the latest HOS flat designs are faulty. All these supposedly may dampen interest or at least hold off purchases of HOS units.

Furthermore, the latest HOS prices offer a discount of 23 to 27 per cent from the market price. There is an unwritten rule that the HOS should have a 30 per cent discount.

A flat in Ka Shun Court in Sha Tin sells for HK$2.44 million to HK$3.27 million. The sizes of the 248 flats range from 445 to 449 sq ft. Flats in Tin Shui Wai’s Ping Yan Court cost between HK$1.49 million and HK$3.16 million, with 2,409 flats available ranging in size from 376 to 573 sq ft.

Public rental tenants should be encouraged to buy under Home Ownership Scheme

But the fact is that the demand for affordable flats is so great after the greed of developers and the miscalculations of the government in the last decade that it has become a floodgate.

And whatever faulty designs and substandard materials they find, people know standards are not much better with the new flats of some leading developers in the private market.

And of course, the most sensible investment advice is: forget about trying to time interest rate movement, the direction of the market and the price movements of neighbouring flats. If you have the money and you need a home for your family, buy it.