New | HK$5 million Kai Tak flat deals a blow to Hong Kong government’s affordable housing plan

China Overseas Land & Investment, which is building apartments on the site of Hong Kong’s former airport, set a higher-than-expected price range on Thursday, delivering a blow to the city government’s programme to make housing affordable for residents during an election year.

China Overseas will sell One Kai Tak for between HK$15,080 and HK$18,418 per square foot before a 15.5 per cent discount. That means the smallest unit, measuring 386 sq ft, will cost about HK$5 million, or HK$12,742 per square foot after discount.

Alfred Lau, an analyst at Bocom International Securities, said the selling price was higher than his expectation. “The price means the developer is treating the project as other private housing developments. But the project should be traded at a discount to private housing, given its resale restrictions,” he said.

Chief Executive Leung Chun-ying launched the “Hong Kong Property for Hong Kong People” programme in early 2012 to help local homebuyers amid a sizzling property market in which nearly 40 per cent of new flats were sold to mainland Chinese.

However, in a policy turnaround, the city’s top official on development said on Tuesday that the pressure to maintain the “Hong Kong Property for Hong Kong People” programme had eased because currently fewer than 2 per cent of the buyers of local properties were from mainland China, attributable to the 2013 introduction of a punitive stamp duty on non-resident buyers.

“Temporarily we will not keep introducing more land only for Hong Kong people because the percentage is so low,” Hong Kong’s Secretary for Development Paul Chan Mo-po said in an interview with the South China Morning Post. “We will also review citizens’ level of acceptance on the two developments recently for sale.”