Date
26 September 2017
The government is set to unveil its 10-year housing plan later this month. Photo: Bloomberg
The government is set to unveil its 10-year housing plan later this month. Photo: Bloomberg

Govt told to lower public housing down payments

The government has been urged to launch affordable housing schemes that would allow middle-class families to pay only 3 percent of the property value as down payment to enable them to acquire their own homes, the Hong Kong Economic Journal reported Tuesday.

The call came as the government is set to announce later this month a 10-year plan for housing, after two years of studies.

Concern group Snail Shell Shelter joined lawmaker Alice Mak Mei-kuen in proposing that the government build home units of about 250 to 400 square feet in size and sell them for HK$1 million (US$129,009) to HK$1.6 million. 

Under their proposal, the units will be run by the Hong Kong Housing Society and buyers will pay only 3 percent of the property value as down payment. The price is calculated at HK$4,000 per square foot of construction cost. 

Stanley Wong Yuen-fai, chairman of the Housing Authority’s subsidized housing committee, said the proposal is viable, considering that the down payment for residential units under the agency’s home ownership scheme is around 5 to 10 percent of the property value.

Wong, however, said it is not practical to link the down-payment ratio to the construction cost as this may result in higher housing prices in suburban districts than in urban areas.

Other groups are suggesting that the government sell newly completed rental homes in public housing estates.

Eddie Hui Chi-man, professor of real estate at the Department of Building and Real Estate of the Hong Kong Polytechnic University, said the government may build home units with quality just one grade below those under the home ownership scheme and sell them at a 35 percent discount to the market value of the properties.

It is just the reverse of the case in 2002 to 2003, when there was a slump in the property market and the government leased units under the home ownership scheme since families were not buying them, Hui said.

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Freelance journalist

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