The HK$1 million first-home question
Would selling discounted flats to young buyers undermine subsidised housing for others?
When Lee Shau-kee, the chairman of Henderson Land Development, said in January he would consider building homes and selling them for HK$1 million each to young buyers, my friends were ecstatic and thought hard about how they could qualify to buy one of them.
"Just HK$1 million for a 300-square-foot flat - although it may be in a rural area in the New Territories - is a good deal for poor people like me," a 27-year-old friend, who earns about HK$15,000 a month but is still repaying government loans for his university degree, said then.
As Hong Kong's home prices have soared to a level where one can barely find a 20-year-old flat for HK$2 million, a brand new private flat at HK$1 million is really attractive.
But the proposal seems to have changed as discussions between Henderson, or Lee, and the government continue.
At first, Lee suggested he would sell the flats at their construction price, about HK$1 million per unit, as long as the government would exempt the developer from the land premium. The government countered suggesting that Lee donate his farmland, on which the government would build the flats. It reportedly selected seven sites, most in the northeastern New Territories, where it could build 10,000 homes for first-time buyers.
Last week, Lee reportedly told a Chinese-language magazine the government believed selling the flats only to young people would be unfair to others.
The report said that although Lee wanted to charge the buyers just for the construction costs, the government thought that was not feasible and might challenge its subsidised housing policies.