4,300+ units to be sold, govt to mull installment premium-payment plan

To cool down the overheating local property market, the government said that it will sell off over 4,300 remaining subsidized units in the coming months, while considering other measures for the subsidized secondary market.

Secretary for Transport and Housing Eva Cheng said yesterday that the Housing Authority will discuss by the end of this month selling the remaining 4,000 units, under the Home Ownership Scheme (HOS), in order to increase the supply of small- and medium-sized flats in the residential market.

"We believe the supply of small- and medium-sized flats will increase significantly in the coming months, while we are also studying possible measures to facilitate transactions in the secondary market under the Home Ownership Scheme," Cheng said.

She added that the government will suggest selling off all the remaining HOS flats at one time, while the flats will be available for application as soon as June.

The Hong Kong Housing Society, meanwhile, announced yesterday that it will sell the remaining 374 flats under the Sandwich Class Housing Scheme (SCHS), a program for "sandwiched" middle-income buyers, and will accept applications from April 7.

The sandwich-class flats are The Pinnacle in Tseung Kwan O, Cascades in Ho Man Tin and Highland Park in Kwai Chung, which are priced with a greater than 20 percent discount off market prices.

The housing society resumed selling the 464 sandwich-class flats at The Pinnacle in early March - a move that has received enthusiastic market response.

Patrick Chow, head of the research department at Ricacorp Properties, said the launch of 4,374 subsidized flats will help damp down the recent price surge in small and medium sized flats, priced at or below HK$2.5 million.

"In the first two months of this year, prices of small- and medium- sized flats have already jumped 10 percent, while they leaped 27 percent in 2009. The sale of subsidized flats will, therefore, cool down the surge among these units," Chow said.

He added that small- and medium- sized flats have accounted for as much as 40 percent and 80 percent of transactions in the primary and secondary residential markets, respectively.

"The market demand for small- and medium-sized flats, therefore, is very strong," Chow said.

Anthony Cheung, chairman of the Housing Authority's subsidized housing committee and Executive Council member, said on Radio and Television Hong Kong yesterday that the authority is now considering allowing HOS flat owners to pay their land premium in installments.

Under the current regulations, owners of HOS flats must pay a premium to the Housing Authority before they can let, sell or assign the flats in the open market.

The premium, meanwhile, is subject to the authority'S calculation, which takes into account the flat's current market value, initial market value and purchase price.

"The government should implement concrete measures to ensure a stable supply of residential property. HOS flats can help with the supply, so we are now selling the remaining subsidized units. However, the flats may still sell out one day," Cheung said.

Amid the continuous surge in home prices, Cheung said the government can only help improve market conditions through adjusting the market supply.

"The property market in Hong Kong has been boosted by the inflow of foreign capital. Facing this external market condition, the government can hardly control home prices through public policies," he added.

(HK Edition 03/16/2010 page2)