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The Government remains committed to its fundamental housing policy objectives of providing public rental housing to the needy and facilitating home ownership for those who wish to buy their own home, the Chief Executive, Mr Tung Chee Hwa, said this in his second Policy Address delivered in Legislative Council today (Wednesday).

Mr Tung noted that since he announced in last year's Policy Address a long-term housing target of building 85,000 flats annually, the environment had changed dramatically. In view of the economic re-adjustment, the Government had to look again at the key components of the housing sector.

"In respect of the public rental component, the Government remains fully committed to ensuring that no household in genuine need of housing should be denied the right to decent accommodation and within a reasonable period of time," Mr Tung said.

"We have pledged to reduce the average waiting time for a public rental unit to three years by 2005, and we are on target to achieve this," he said.

On the home-ownership scheme (HOS), Mr Tung said the sales programme would proceed largely as planned. The Government would closely monitor the effect of the programme on the home ownership market, and fine-tune the programme as necessary to ensure overall market stability.

"For the longer term, as regards HOS flats, we will consider the extent to which we will continue to build such units - the 'bricks and mortar' approach - as opposed to the alternative of offering home ownership loans," Mr Tung said.

He had asked the Secretary for Housing to consult all interested parties, including the Housing Authority, Housing Society and representatives of the property and banking sectors, and to reach a conclusion on the issue as soon as possible.

As to the "sandwich" class, Mr Tung said as many good-quality flats in the private sector were now affordable to them, the Government had decided to suspend the building of flats under the schemes for this group with the exception of those projects on which work had started.

He stressed that however the Government would continue to provide financial assistance to home buyers, for example, downpayment loans to the "sandwich class" to allow them a wider choice of home in the private sector.

Mr Tung said he had asked the Secretary for Housing to rationalise the Home Starter Loan Scheme, the Home Purchase Loan Scheme and the Sandwich Class Housing Loan Scheme, and also to ensure that these schemes would continue to provide the appropriate level of assistance to households in need as well as making the best use of public funds.

Turning to the private residential market, Mr Tung said: "I see it as our first priority to do what we can to promote stability in this sector. Nonetheless, the actual number of flats built annually by the private sector over the next five years is likely to vary according to market demand, and in line with developers' own commercial considerations."

Mr Tung added that the Government would decide early in 1999 whether or not to lift the moratorium on land sales which was imposed earlier this year, having regard to the need to ensure stability in property market.

" In the longer term, the Government's focus will be on ensuring that we produce sufficient land to be able to meet our needs," he said.

End/Wednesday, October 7, 1998

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