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Following is a question by the Hon Chan Hak-kan and a written reply by the Secretary for Transport and Housing, Ms Eva Cheung, JP in the Legislative Council today (5 November 2008):
Question:
Some young people have relayed to me that presently, most young people aged between 20 and 30 years are not eligible to apply for public rental housing because their incomes exceed the income limit, but they cannot afford private housing flats which typically cost over a million dollars each. On the other hand, the Hong Kong Housing Society ("HKHS") once implemented the Home Starter Loan Scheme ("HSLS") whereby eligible families and singletons are granted low-interest home starter loans of amounts up to $600,000 and $300,000 respectively. However, HSLS was discontinued in 2002. In this connection, will the Government inform this Council whether:
(a) it knows the respective numbers of applications which HKHS received from families and singletons under HSLS each year from 1998 to 2002, the respective numbers of approved and rejected applications among them, the total amount of loans granted, and the respective percentages of cases of repayment of loans on time and default in loan repayment; and
(b) it will discuss with HKHS the re-launching of HSLS; if not, of the reasons for that?
Reply:
President,
The Home Starter Loan Scheme (HSLS), which was introduced in 1998, was one of the Government's measures to meet the policy objective of achieving a 70% home ownership target in ten years as stipulated in the 1997 Policy Address. HSLS assisted middle-to-low income families and singletons (Note) to purchase homes by providing them with low interest loans for the down payment and related expenses. Under HSLS, Government provided $18 billion to the Hong Kong Housing Society (HKHS) for making loans to eligible families and singletons. The maximum loan amount was $600,000 for family applicants and $300,000 for singleton applicants, or 30% of the purchase price of the residential property, whichever was the lower. HSLS ceased accepting applications by end March 2002.
Following the Government's repositioned subsidized housing policy in 2002, our housing policy objectives are to focus resources on the provision of public rental housing for low income families who cannot afford private housing, withdraw from playing the role of a property developer, cease the production and sale of subsidized sale flats, and minimize intervening in the market. Encouraging the public to purchase homes is no longer an objective of the Government's housing policy.
My replies to the two questions are as follow:
(a) HSLS started accepting applications in April 1998 and ceased doing so by end March 2002. According to the information provided by HKHS, 80,007 applications were received during this period, of which 33,433 were approved, and the total loan amount was $14.85 billion. The remaining 46,574 loan applications were unsuccessful because the applicants had failed to meet the eligibility criteria of HSLS or had not completed the application process.
As at mid-October this year, of the 33,433 HSLS loans, 15,599 were fully repaid of which about half of them had late repayment records during the repayment period. Out of the 15,155 loans with repayments currently on schedule, about 30% had late repayment records in the past. Of the remaining loans, 846 had defaulted payments for less than six months; 360 had defaulted payments for over six months, and HKHS had commenced litigation proceedings to recover the outstanding loan amount; and 1,473 were bankrupted cases.
(b) As mentioned above, the policy objective of the Government's repositioned housing policy in 2002 is to focus resources on helping the low income families to meet basic housing needs. Encouraging the public to purchase homes is no longer an objective of the Government's housing policy. We consider that a decision on purchasing a property should be a matter of personal choice and affordability. The Government should not take up the role of a lending institution and influence an individual's decision on home ownership which should be premised on affordability. We have therefore no intention to re-launch HSLS.
Given the global financial situation, the local property market is facing great uncertainties. Under such circumstances, the public need to be even more prudent in making decisions on flat purchase. The Government will continue to closely monitor the development of the property market and the demand and supply of private residential properties.
Note: At the start, HSLS accepted applications from families of two persons or above only. It started to accept applications from non-elderly singletons in December 1999.
Ends/Wednesday, November 5, 2008
Issued at HKT 12:25
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