A property developer’s proposed scheme aimed at giving university graduates a leg-up onto Hong Kong’s housing ladder is “encouraging” but will not have any serious impact in the face of record-high home prices, according to some of those it is supposed to help. Adrian Cheng Chi-kong, grandson of the late tycoon Cheng Yu-tung and executive vice-chairman of New World Development (NWD), last week said it would offer graduates “super-low” down payments – “several hundred thousand Hong Kong dollars” – for flats costing around HK$5 million (US$640,000) in its future projects. It’s depressing to think that I’ll be working most of my life just to buy a tiny flat Samuel Chan, University of Hong Kong graduate NWD, Hong Kong’s eighth largest builder with 16 new projects for sale and 27 completed developments, will also absorb the stamp duty and allow a longer mortgage repayment period at an interest rate close to the market rate, Cheng said. Graduates from Hong Kong universities with a stable income after two to three years of working will be eligible for the “special financing scheme”. Under current regulations, home buyers can get an 80 per cent mortgage loan for flats priced between HK$4 million and HK$6 million. “It’s somewhat of a relief to see that the private sector is stepping in, when the government has clearly done little to nothing about the housing situation,” said Samuel Chan, a 22-year-old graduate from the University of Hong Kong working in the finance industry. “But this still does not address the bigger picture issue of overinflated property prices – it’s depressing to think that I’ll be working most of my life just to buy a tiny flat. “That’s not to mention the fact wages for graduates have plateaued, even in white collar positions.” In addition, the scheme might only serve graduates who already enjoy privileged financial status, said Tsz-fung Tse, a postgraduate student. “You can assume a 10 per cent down payment will most probably serve the interests of the top 10 per cent of graduates, or even less,” Tse said. “After all, if the home prices remain sky-high, the concept of a ‘first flat’ does not exist in young people’s decision-making.” Hong Kong’s fresh university graduates receive an average monthly salary of HK$14,685 (US$1,880) in their first job, a survey by jobs portal JobsDB.com found in January. If the home prices remain sky-high, the concept of a ‘first flat’ does not exist in young people’s decision-making Tsz-fung Tse, postgraduate student Buying houses under the scheme may still mean participants have to make sacrifices in other areas of their lives, said Alex Wu, a 23-year-old graduate from the University of Hong Kong. “For graduates, taking on the heavy burden of mortgage debt only two to three years after graduation means they would lose so many possibilities for their lives,” Wu said. However, Jenny Lu, a 22-year-old events coordinator, found the scheme attractive as her rent is already high. “I’m already paying over HK$8,000 a month for rent, so it would be beneficial and reasonable if the mortgage is around HK$15,000 to HK$16,000 a month,” Lu said. She would consider buying a home if she is in a stable relationship with a partner, who can pay the mortgage with her. New World weighs ‘super low’ down payment scheme to help university grads get on housing ladder NWD said the 100-unit Parkville project in Tuen Mun, with units ranging from 422 square feet to 843 sq ft, starting from HK$5.87 million, will be the test case. A total of 15 units will be allocated to the scheme at this stage, with details to be released in about two months. The proposal was unveiled after the company reported that core earnings for the year under review rose 26.5 per cent to HK$7.13 billion (US$914.15 million), beating a HK$7.12 billion estimate from a Bloomberg survey of analysts. The proposal is “definitely an encouraging scheme,” but the location, limited to Tuen Mun, may be the downside of it, said Betty Park, a 23-year-old junior equity research analyst. Located in northwest Hong Kong, Tuen Mun is about 35 kilometres away from Central, the city’s central business district.