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The Chief Executive, Mr Donald Tsang, has today (October 13) in his annual Policy Address introduced a range of measures to stabilise the property market, provide more land for small and medium flats and assist potential homebuyers.
"Housing is currently the greatest concern of our people," Mr Tsang said in his Policy Address entitled "Sharing Prosperity for a Caring Society".
The Chief Executive announced short, medium and long-term housing strategies including establishing a land reserve, introducing an enhanced scheme of subsidised housing and removing real estate investment from the Capital Investment Entrant Scheme.
He said that by September private residential property prices in Hong Kong had risen by 20% year-on-year, while the mortgage-to-income ratio remained on a rising trend reaching 41% in the second quarter of this year.
"We should address the fundamentals by increasing land supply in response to market demand," Mr Tsang said.
"We will create a land reserve, use the Application List system as the main axle, supplement it by a Government-initiated land sale arrangement, to ensure that there will not be any shortage in housing land supply."
The Chief Executive said that over the past 10 years, the average take up rate of first-hand private residential flats was 18,500 units a year.
He said: "To ensure a healthy and stable property market, in the next 10 years, on average land needs to be made available annually for some 20,000 private residential flats.
"I need to stress that this is not a fixed target for residential flat production.
"Our aim is to build up a sufficiently large land reserve over a period of time to ensure stable land supply for the residential property market.'
Mr Tsang noted that, in response to a study on industrial sites across Hong Kong, the Government had proposed to rezone about 30 hectares of this land for residential use.
As at end-September, a total of eight residential sites were sold this year which could provide some 4,700 new flats. Mr Tsang estimated that a total of 61,000 first-hand residential units would come onto the market in the next three to four years.
In addition, the Chief Executive announced an enhanced subsidised housing scheme to be known as the My Home Purchase Plan.
"Under this scheme, the Government will provide land for the HKHS (Hong Kong Housing Society) to build 'no-frills' small and medium flats for lease to eligible applicants at prevailing market rent," he said.
The tenancy period under the scheme will be up to five years, during which time tenants may purchase the flat they rent or another flat under the Plan at the prevailing market price, or a flat in the private market, within a specified timeframe.
"They will receive a subsidy equivalent to half of the net rental they have paid during the tenancy period, and use it for part of the down payment," Mr Tsang said.
Sites in Tsing Yi, Diamond Hill, Sha Tin, Tai Po, Tuen Mun and other areas have been earmarked for the construction of some 5,000 flats under the Plan.
The first project under the Plan in Tsing Yi would provide about 1,000 flats by 2014.
To further address the shortage of more affordable housing, Mr Tsang added: "We will discuss with the URA (Urban Renewal Authority) and the MTRCL (MTR Corporation Ltd) the provision of more small and medium flats in their urban renewal projects and the residential developments along the West Rail respectively."
The Chief Executive also pledged to enhance the transparency of property sales.
"As we cannot reach a consensus with the REDA (Real Estate Developers Association of Hong Kong) on the regulation of the sale of first-hand completed flats, the THB (Transport and Housing Bureau) will set up a steering committee to discuss specific issues on regulating the sale of first-hand flats by legislation and put forward practicable recommendations within one year, including the use of saleable floor area as the only basis for listing the price per square foot and eradicate the problem of 'shrunken flats'.
To avoid fuelling home price rises, and in response to public concerns, the Chief Executive announced that applicants under the Capital Investment Entrant Scheme would no longer be able to use real estate as an investment category.
He said that while these home purchases represented less than 1% of total turnover in the local property market, such investments accounted for 42% of the total investment under the scheme in the first nine months of 2010.
Following the building collapse in Ma Tau Wai Road in January, the Chief Executive pledged to step up efforts to promote the safety and maintenance of old buildings through public awareness and legislation.
"We will introduce legislation to tackle the problems of building dilapidation and unauthorised building works, including 'sub-divided units', which have drawn widespread concern in the community," Mr Tsang said.
Mr Tsang also announced plans to review the urban renewal strategy, and to set up District Urban Renewal Forums, with the pilot forum to be established in Kowloon City.
A $500 million Urban Renewal Trust Fund would also be set up to subsidise studies and activities conducted by the forums, recruit urban renewal social service teams and support preservation and revitalisation projects within the scope of urban renewal.
Ends/Wednesday, October 13, 2010
Issued at HKT 13:06
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