Hong Kong’s Housing Authority proposes doubling length of ban on buyers reselling subsidised homes to 10 years
- The rule, tightened from an existing five-year ban on resale, is one of a series of measures to make such homes more affordable
Buyers of all future government-subsidised homes could be barred from reselling their properties for 10 years, limiting their ability to make a quick profit, the Housing Authority has proposed.
The rule, tightened from an existing five-year ban on resale introduced by the current administration, was one of a series of measures to make such homes more affordable, along with a new pricing mechanism.
Currently, homeowners who have bought government-built flats this year can only sell their properties on the open market after five years if they have repaid a premium to the authority.
“The proposal has balanced different opinions from society and the authority’s committee members and also strikes a balance between tightening resale restrictions and ensuring a turnover of subsidised flats,” an authority paper seen by the Post reads. “By [extending it to 10 years], this has already responded to concerns of selling the flats for speculation.”
The authority’s subsidised housing committee will discuss the proposal on Friday.
The change would apply to both of the government’s subsidised housing schemes, the Home Ownership Scheme and the Green Form Subsidised Home Ownership Scheme, under which flats are sold exclusively to public housing tenants.
If approved, the 10-year resale ban would take effect next year, and would be a return to a policy adopted between 1978 and 1998, which was relaxed in 1999 after the Asian financial crisis.
The rule would not cover an upcoming batch of 2,545 subsidised homes in Sham Shui Po, which would be put up for sale in December.
The flats, priced under a new formula that not only worked in a discount of the market price, but also considered buyers’ family budget and affordability, could go for between HK$932,500 (US$119,000) and HK$3.1 million (US$395,800), or an average price of HK$6,243 per square foot. Sized from 184 sq ft to 452 sq ft, the flats would cost about 58 per cent of the market price.
Under normal circumstances, such an extension should involve making amendments to the Housing Ordinance, but the paper stipulated that the changes could be implemented for next year’s sales by adding conditions in the land lease of the site, instead of going through the time-consuming legislative process.
However, lawmaker Andrew Wan Siu-kin said that while he welcomed such an extension, it would pose legal risks.
“If the sales agreements or land lease conditions stipulated by the authority, a public body, are not consistent with the current laws, they could be subject to judicial review,” Wan said.
“I hope the authority will not disregard the proper legal procedures for the sake of expediency.”
The Federation of Public Housing Estates, an alliance of 11 community associations representing public housing residents, welcomed the proposal.
“It is the right decision to make. It sends a clear message to the public that subsidised housing is for people to live in and not for making profit,” said federation executive director Anthony Chiu Kwok-wai.