Many said they were looking to buy two-bedroom flats, with the Kai Tak area being the most popular choice because of its proximity to the commercial hub of Kwun Tong and the rest of Kowloon.

Thomas Chiu, who showed up at 9am, was among the hopefuls. He said he wanted to buy a two-bedroom flat in Kai Tak for his family.

“We’re currently living in Tai Po in a one-bedroom flat. I sleep in the living room, while my wife and daughter stay in the bedroom,” the 57-year-old said. “My daughter is 16, so it’s better if she can have her own room now.”

He said he submitted his form on the last day of the application period, which started on July 31, as he had been thinking about whether he would buy a private flat or a public one.

Property developer CK Asset Holdings on Saturday sold all 626 homes at Coastal Line II in Yau Tong for an average of HK$14,686 (US$1,880) per square foot, a seven-year low in prices for new flats.

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The price of some flats fell to HK$4 million, similar to that of a subsidised one.

Chiu, who works in hospitality, said private property was unattainable for him, even at discounted prices.

“It doesn’t matter if private flats are becoming cheaper, there’s still no chance for us. If a flat costs HK$5 million to HK$6 million, we can’t even afford a down payment,” Chiu said.

“The only private flats we can afford are ones which will be ready in 20 or 30 years.”

The government scheme this year offered 9,154 flats across six sites in Kai Tak, Kwun Tong, Tuen Mun and Yuen Long at 62 per cent of the market price, lower than the rate in 2022.

The two-block Kai Yuet Court complex in Kai Tak has more than 2,000 flats on sale, while three developments in Kwun Tong North are offering over 3,500 homes.

Prices for these flats, which are slated for completion between 2025 and 2026, vary between HK$1.49 million and HK$4.9 million.

Leung Man-kwong, deputy chairman of the Legislative Council’s housing panel, said he had anticipated that demand for subsidised flats would have been higher this year.

The oversubscription rate, which refers to demand in relation to supply, of 10.9 for the latest round marks the lowest since authorities resumed selling subsidised flats in 2014. Applications for last year’s batch of more than 9,000 flats were oversubscribed by 27 times.

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Leung said he believed some people had decided not to apply because of a recent slump in property prices.

“When the application for subsidised flats began, overall property prices … were showing a downward trend,” he said.

“There were also some new private flats being sold at prices which were similar to those of subsidised homes. People are wondering whether buying private flats will be an even cheaper option in the future.”

Liu Xiao Hai, who went to the customer service building on Monday with her husband and son to submit an application, said owning private property was the family’s long-term goal, but they had decided to buy a subsidised flat in the meantime.

She applied for a two-bedroom flat in Kai Tak, saying transport in the area would make it easy for her son to commute to school.

“We’re here to try our luck. My main goal is to buy a private flat in the long run, and our budget for that is HK$10 million, but for now we’ll try getting a subsidised property as our sons grow up,” said the 42-year-old investor, who has two sons aged 9 and 13.

Leo Cheung Sing-din, an adjunct associate professor in real estate at the University of Hong Kong, said public flat tenants affected subsidised housing demand the most as they were not bound by income ceilings and had more disposable income.

“When the private market is volatile, this will also affect the buying sentiment for public flats, as people will look to the property market for economic indicators,” Cheung said.

“Green form applicants, who have the largest income range and unpredictability, have the strongest buying power in choosing whether they want to buy private or government properties when private property prices drop.”

Public flat tenants, also known as green form applicants for subsidised housing, are not required to undergo income and asset tests when applying, compared with those living in private property that have to meet certain income, family composition and property ownership requirements.

In April, the government tightened rules for public flat tenants who already own property from buying subsidised homes, after the former father-in-law of murdered model Abby Choi Tin-fung was found to own a luxury flat and a subsidised one.

Additional reporting by Elizabeth Cheung