Wednesday, October 12, 2011

scmp: Tsang relaunches HOS in policy addres

Tsang relaunches HOS in policy address

Chief Executive Donald Tsang Yam-kuen announced in his final policy address on Wednesday the relauch of the Home Ownership Scheme shelved nine years ago.
The subsidised housing scheme is designed to help aspiring homebuyers who have been priced out of the residential property market.

Tsang said the resumed HOS would involve construction of 17,000 flats over four years from 2016 to help families who earn less than HK$30,000 a month buy homes. An amount of between 2,500 and 6,500 flats would be made available each year and the government's long-term target was to set the amount at around 5,000 flats a year.

Under the HOS, the government builds small-and-medium flats and sells to buyers at subsidised prices. The scheme was shelved in 2002 as part of efforts to rejuvenate the then-battered property market.

Its resumption comes amid a rising property market in Hong Kong. Property prices have risen by about 12 per cent this year – surpassing records in 1997 – because of a small supply of flats, low interest rates and abundant liquidity.

“We share the public's concern about rising property prices and the difficulty in buying affordable small and medium flats. The pressure is most felt by families whose household income exceeds the limits for public rental housing application but who may not be able to afford owning a flat,” he said.

“In response to the aspirations of low and middle-income families to buy their own homes, the government now puts forward a new policy for the resumption of the HOS,” Tsang added.

He said the first batch of new HOS flats was expected to be ready for pre-sale in 2014 or 2015. They would be between 400 and 500 square feet in size and be priced at around HK$1.5 million to HK$2 million.

He said flat prices under the resumed scheme would be set with reference to the mortgage repayment ability of eligible households, rather than to the market price of a comparable flat in the private market in the previous scheme.

The flats would be restricted from re-sale to open market for the first five-years after purchase – the same period as previous subsidised housing schemes.

He said the Housing Department had started preliminary planning and investigations for sites identified in Sha Tin, Tsuen Wan and Yuen Long, and would commence similar work for other sites shortly to start the first phase of the project.

Tsang said the actual number of flats to be built or put up for sale each year would be flexible depend on demand at the time.

“When there are enough reasonably priced small and medium flats in the private market, we will adjust the number of subsidised flats to be built and sold for the year. We may even stop building and selling such flats,” he said.

This was Tsang's seventh and final policy address since he took office in 2007. He singled out housing as the first policy area to deal with in the blueprint. The policy address was made at the first Legislative Council meeting held in the new government headquarters in Tamar.

Tsang also pledged to increase the land supply, enhance the existing urban renewal scheme and provide 15,000 new public housing rental units each year in a bid to address recent public concerns over housing.

Tsang said he had set a target of providing 40,000 residential units of various types a year on average. To achieve the target, he proposed plans to look out for new lands from industrial sites, green belt areas in the New Territories, and 150 hectares of agricultural land in North District and Yuen Long, now mainly used for industrial purposes or temporary storage, or deserted.

"Even when demand for land declines, land development will continue. The newly-developed land will be kept in the government's land reserve and made available when appropriate. By doing so, we will be able to supply sufficient land for more than 40,000 units each year when demand rises,” he said.

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