CE to give HOS a second thought
An overview from The Peak of highrise buildings on Hong Kong Island. Chief Executive Donald Tsang will reveal whether the government will resume the suspended Home Ownership Scheme in his policy address in October. Mike Clarke / AFP |
More studies on the way before a decision is made this October: John Tsang
The Hong Kong government said it will decide by October at the earliest whether to resume the Home Ownership Scheme (HOS) – a subsidized housing program which gives eligible low-income residents a chance to purchase flats at a discount of 30 to 40 percent to the market price.
The government has noticed people’s demand for homes and Chief Executive Donald Tsang will reveal whether to resume the suspended program in his policy address in October, Financial Secretary John Tsang said on Monday.
“Existing housing policies were all made under long debate in the government, and to restore the suspended housing scheme, it will need to study whether the social environment has changed,” John Tsang told reporters at a media briefing.
The HOS was instituted as part of the government policy for public housing in the 1970s with the first batch of flats made available in 1980.
However, the Hong Kong government halted the program in 2002, after the city’s home prices plunged substantially from the previous peak in 1997, and developers complained that the market was distorted by excessive unfair competition due to the scheme.
Rejecting calls to restore the HOS, the Chief Executive in his policy address last year has proposed an alternative My Home Purchase Plan, under which the government would build 5,000 “no frills” flats to accommodate prospective home-buyers in the so-called “sandwich class” – local families with incomes under HK$39,000, financial assets under HK$600,000 and those who have not owned property in the past 10 years.
Anthony Cheung, chairman of the Subsidized Housing Committee of the Hong Kong Housing Authority, said the resumption of HOS is expected to solve the livelihood issue caused by the overheating property market, but looking for land banks to build these subsidized homes will become another issue for the government to solve.
Stewart Leung, vice-chairman of the Executive Committee of the Real Estate Developers Association of Hong Kong, said the chamber and a majority of the members favor the reopening of the HOS program.
But, “I believe the government does not intend to break down the property market in Hong Kong”, Leung added.
Hong Kong’s property situation has become “abnormal” and risks in the market are still increasing, John Tsang wrote in his official blog on Sunday, adding that he is concerned about the risk of a property bubble in the city and has no hesitation in increasing the intensity of measures if necessary.
Hong Kong’s home prices have gained more than 70 percent since 2009, data from the Centaline Property Agency Ltd shows.
“Our housing policies aim to ensure a healthy and stable development of the property market, and these measures are ‘counter-cyclical’ macro and prudent ones,” John Tsang wrote in his blog.
Tao Dong, China economist at Credit Suisse, said on Monday that Hong Kong’s property market has showed signs of reaching its peak, and he expects housing prices to start sliding over the next three years.
“Amid a low interest-rate environment and inflows of hot money, the reconstruction of subsidized housing shows Hong Kong’s efforts in protecting the interests of vulnerable groups in the city,” said Tao.
China Daily
(HK Edition 06/21/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-06/21/content_12739564.htm