All eyes on the Home Ownership Scheme
Chief Executive Donald Tsang is widely expected to unveil plans to resume the Home Ownership Scheme (HOS) in his final Policy Address next Wednesday.
Experts told China Daily that HOS – a subsidized housing program – will certainly help the so-called sandwich class to buy a flat while unlikely to cause a significant impact on home prices.
Recent reports citing anonymous sources said that Tsang will announce the intention to build 5,000 subsidized homes next year, with the household monthly income ceiling adjusted to HK$30,000 from the previous HK$27,000.
The program, giving eligible low-income residents a chance to buy flats at a discount of 30 to 40 percent to the market price, may affect market sentiment to some extent but is unlikely to rock existing sky-high home prices in the city, Edward Au, a Hong Kong board member at the Royal Institution of Chartered Surveyors said on Friday.
“Experience tells us that this scheme has played an efficient role in helping those aspiring to buy a home in the city but with limited income,” said Au.
“Since the rumored 5,000 units per year is a comparatively small number in relation to the past and private residential developers will still dominate the market, I believe the impact will be rather limited if the government pledges to resume the plan.”
The HOS worked as a subsidy for public housing in Hong Kong in the 1970s and the first batch was made available in 1980. But the authority halted the program in 2002 after the city’s home prices plunged substantially from the previous peak in 1997.
Yu Kam-hung, senior managing director of valuation & advisory services for CB Richard Ellis Greater China said the HOS had supported the sandwich class effectively in the past without affecting the private residential market because the government at the time treated the scheme as a long-term housing policy for Hong Kong.
However, the government once again needs a long-term, sustainable housing policy – a stable channel which will help people buy homes and also build up confidence in the market, Yu believes.
Ricky Poon, executive director of residential sales with Colliers International Hong Kong, also believes that due to its limited scale, reviving HOS won’t make much of a difference to the city’s property prices. Nevertheless, he thinks the market is on a downward trend anyway.
“We can expect prices to decline by 10 to 15 percent in the next three to six months,” Poon said.
litao@chinadailyhk.com
China Daily
(HK Edition 10/08/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-10/08/content_13845244.htm