Revival of Hong Kong subsidised homes scheme puts onus on developers
- Those who have benefited most from city’s booming housing market should now ensure push for cut-price flats is a success
Buying a private flat at just two-thirds of the market price may sound too good to be true in a city notorious for its sky-high property prices. The revival of a long-defunct subsidised home purchase programme – with more requirements for developers this time – is the latest attempt by the government to tackle the housing conundrum.
With supply woefully short and prices increasingly unaffordable, every viable measure should be considered. But there are also hurdles to overcome if the initiative is to become a success.
Under the revised pilot partnership scheme announced on Tuesday, developers may build subsidised flats on discounted government sites or on their own rezoned land after approval, with the units to be sold to eligible buyers at 65 per cent of the market rate. Two plots, in Tung Chung and Chai Wan, are expected to produce a total of 2,300 flats for sale by 2028-29.
The government appears to have introduced some sensible new features. For instance, a buy-back government guarantee will no longer apply, an arrangement said to make developers bear the risk and ensure the output will be marketable and of quality.
To address growing concerns over the so-called micro units, flats cannot be smaller than 26 square metres, and each project must have at least 70 per cent of flats with a minimum of 34.8 square metres.
The scheme, officials said, could tap into market forces to enhance quantity, speed, efficiency and quality. The intention is laudable.
But the dominance of developers and a distorted housing market have inevitably raised concerns and scepticism, with some wondering whether the partnership will be of more benefit to developers than homebuyers. However, the adjustments, such as size restrictions and the lack of buy-back protection, may affect developers’ interest.
There are also concerns as to whether buyers may enjoy concessionary mortgage ratios as do those under the conventional subsidised Home Ownership Scheme.
The government expressed confidence in quality control and prices, referring to a requirement for developers to commission an independent checker to conduct a final inspection of building works as well as the need for final government approval for sales. Whether the units will be affordable and of quality shall be closely watched.
Home Ownership Scheme to bar property-owning Hong Kong public housing tenants
The scheme may still look like old wine in a new bottle to some. In any case, the output is small and only speeds up supply by two to 10 months.
But the clock is also ticking fast for an administration with just four more years to deliver. Ultimately, it depends on the response of the private sector.
Having long benefited from the booming property market, it is time the developers did their part to help tackle the housing crunch, and at more affordable prices.
