Will influx of 4,800 subsidised flats impinge on quota for public rental housing in Hong Kong?
Authorities reviewing initial proposal after experts fear effects of sudden and large supply
A plan to offer 4,800 cheaper, subsidised flats in the New Territories faces uncertainty after concerns were raised that this may impinge on the quota for public rental housing and further lengthen waiting times, according to a Hong Kong Housing Authority paper.
Last year, Chief Executive Carrie Lam Cheng Yuet-ngor announced in her policy address that the Green Form Subsidised Home Ownership Pilot Scheme – a scheme that sells government-built flats exclusively to public housing tenants at knockdown prices – should be adopted as a regular one.
Some 4,800 flats in Fo Tan, originally built for public rental housing, were considered suitable for the next batch of flats to be sold under the scheme later this year, after a preliminary assessment by authorities.
But on Friday, Stanley Wong Yuen-fai, chairman of the Housing Authority’s subsidised housing committee, said the government was reviewing the feasibility of the Fo Tan site after committee members expressed fears that such a large supply push could be risky.
Some 4,400 subsidised flats under another government scheme – the Home Ownership Scheme (HOS) – are already set to be sold on the market in the beginning of this year.
Wong said that it was “unprecedented” for more than 4,000 subsidised flats to hit the market in one go.
In the year 2016-17, some 3,000 subsidised flats were sold. An average of around 1,100 subsidised flats were sold annually before 2011, after which the government stopped production due to a market downturn.
“The 4,800 flats would almost amount to 20 per cent of the annual allocation of public rental housing. Members believe this is quite a high number and would have a considerable impact on the average waiting time for public rental housing. If we launch 4,800 at one go, it seems a little bit too aggressive,” Wong said.
According to Wong’s calculations, if all 20,000 new public rental housing flats a year were converted for sale under the scheme, it would delay the average waiting time for applicants by almost four months, pushing the current average waiting period to almost five years.
Wong said members had suggested a number of alternatives for the government to look into, such as whether the Fo Tan flats could be launched in phases, or if there were other more suitable sites.
Wong suggested that 2,000 subsidised flats would strike a balance between the needs of aspiring homeowners and the impact on the waiting times for public rental housing.
The authority would reconsider details of the Fo Tan project and put forward an alternative proposal for the committee’s approval so the next batch of flats could be sold by the end of this year, according to the paper.
The committee will also meet on Tuesday to discuss if the Green Form pilot scheme should be adopted for long-term use.
Lawmaker Andrew Wan Siu-kin, a committee member, opposed making the scheme a regular one with an annual quota, and said flats should be sold on an “as-needed” basis.
“It does not seem fair to sell flats that were allocated as public rental homes to buyers when there are still more than 280,000 people in line for public rental housing,” Wan said.
Wan agreed with Wong that 2,000 flats should be sold in the next batch at even lower prices based on construction costs or what people could afford.
The current pricing mechanism for HOS flats are linked to the property market. They are usually sold at a 30 per cent discount compared with those in the private market.
In 2016, more than 16,200 applicants competed against each other to buy 857 flats in San Po Kong under the pilot scheme at a discounted rate of 40 per cent.
If the scheme becomes regular, flat prices will be 10 per cent cheaper than those of the HOS flats sold that year, according to a proposed price mechanism in the paper.
Flat owners are banned from selling their homes in the open market for six years after acquiring the subsidised properties. If they apply as a public rental flat tenant, they will also be required to return their public flats to the authority in 60 days upon obtaining their new homes.