Housing Authority warns cheaper mortgage scheme floated by Hong Kong leader could hurt cash flow in coming years

Annual spending on construction to double to more than HK$60 billion or greater in four years, finance committee chair Professor Chan Ka-lok warns

Housing Authority will run into trouble if government goes ahead with mortgage plan that would slash payments and monthly instalments for subsidised flats, he says

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A construction site at Diamond Hill. The city’s biggest provider of public housing expects to record a HK$10.1 billion surplus for the coming financial year. Photo: Dickson Lee

Published: 5:34pm, 6 Jan 2022Updated: 6:22pm, 6 Jan 2022

Hong Kong’s Housing Authority will have to double its construction expenses to cope with an expanding public housing programme beginning in 2026, the authority’s finance committee chair has warned.

But its cash flow could be constrained by a scheme floated this week by Hong Kong leader Carrie Lam Cheng Yuet-ngor to make mortgages more affordable, Professor Chan Ka-lok from the school of business at Chinese University told a press conference on Thursday.

While the authority could cover its expenditures for the next five years, annual spending on construction would double to more than HK$60 billion (US$7.69 billion) or greater in four years, as the number of flats built in the latter half of the coming decade increased significantly, Chan said.

“We are still in an early stage because the government only said that land has been reserved [to build housing], but it hasn’t revealed details of the development plans,” he said. “No accurate assessment [of the cost] can be made at this moment.”

Professor Chan Ka-lok from the school of business at Chinese University. Photo: Gigi Choy

In her October policy address, Lam said her administration had already identified about 350 hectares (865 acres) of land needed to build 330,000 public housing flats in the coming decade.