Hong Kong housing

Plan to increase discount in Hong Kong’s Home Ownership Scheme will hurt Housing Society financially, says chairman

Marco Wu says he hopes to speak to the government about the idea, announced last month by city leader Carrie Lam as part of measures to ease housing crisis

PUBLISHED : Saturday, 07 July, 2018, 9:05pm
UPDATED : Saturday, 07 July, 2018, 11:15pm

A plan to sell subsidised housing at almost half the market rate will leave one of the groups running the sales out of pocket to the tune of up to HK$1 million (US$127,000) per flat, its leader said on Saturday.

Housing Society chairman Marco Wu Moon-hoi said he hoped to speak to the government about the idea.

Last month Chief Executive Carrie Lam Cheng Yuet-ngor announced measures to ease Hong Kong’s housing crisis. They included reforming the way prices are set for flats on the Home Ownership Scheme run by the society and the Housing Authority (HA) and subsidised sale flats provided by the society. The Home Ownership Scheme helps young couples and families struggling to buy property.

The government intends to set prices at 52 per cent of the market rate, instead of the current 70 per cent.

Wu told a radio programme on Saturday the new measure would put great pressure on the society’s finances in the long term.

“Under the present arrangement, the Housing Society needs to pay half of the full market value of the land,” Wu said. He added that the arrangement was different to the one with the HA, which only covers the cost of getting the site ready for construction.

“If we continue to do that, and then sell our flats at a bigger discount rate then we will suffer a financial loss. It will be about half to 1 million dollars per unit sold,” Wu said, suggesting the government waive the land fee for the society.

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The Housing Society is an independent, non-governmental and non-profit organisation, acting as a bridge between public housing and the private sector. It is meant to be self-financing.

"We would like to have the opportunity to discuss with the government what would be a long-term financial arrangement which would enable the Housing Society to survive," Wu added.

Officials in Hong Kong, the world’s priciest place in which to buy property, have recently stepped up efforts to increase housing supply and help city residents buy a place to live. According to official statistics, there were 272,300 applications for public housing as of March. Families face a wait of at least five years and one month for a public flat, while the elderly face an average wait of two years and eight months.

Lam also announced a plan to use private housing sites to build public flats. On that, Wu noted that a piece of land in Kai Tak would be ideal to relocate the residents of Chun Seen Mei Chuen while the 50-year-old public estate is redeveloped.

He said Lam briefly spoke to him about using the land to ease that kind of redevelopment.

Chun Seen Mei Chuen has 1,000 flats, but plans were afoot to replace the current buildings with taller ones, to boost the number to 1,600, he said.