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Following is a question by the Hon Abraham Shek, and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (December 5):
Question:
The Chief Executive announced in July this year that, from early 2013 onwards and before the new Home Ownership Scheme (HOS) is launched, 5 000 eligible white form applicants for HOS each year would be allowed to purchase HOS flats on the HOS Secondary Market (Secondary Market) without paying premium. It has been reported that since the announcement of this measure, the prices of HOS flats on the Secondary Market have risen continuously. For example, in August this year, an HOS flat of 21 years old in Tsing Yi was sold after payment of premium at a price almost 20% higher than that of a private residential flat of only nine years old in the same district. In this connection, will the Government inform this Council:
(a) whether it has assessed why the prices of HOS flats on the Secondary Market have risen continuously and even surpassed the prices of private residential flats on the Secondary Market in the same district;
(b) whether it has assessed if the current price levels of HOS flats on the Secondary Market, both for those with premium unpaid and those paid, are beyond the affordability of the public; if the assessment result is in the affirmative, how the Government upholds the policy objective of HOS as a form of subsidised housing; if the assessment result is in the negative, whether it has assessed at which level the prices of HOS flats on the Secondary Market would be beyond the affordability of the public; and
(c) whether it will conduct a comprehensive review of the current measures for revitalising the Secondary Market, including the consideration of requiring HOS flat owners to sell their flats only to sitting or prospective tenants of public housing, so as to uphold the policy objective of HOS being a form of subsidised housing and different from private residential flats, which may be transacted freely; if it will, of the details; if not, the reasons for that?
Reply:
President,
We acknowledge the aspirations for home ownership in the community, and understand that some people need Home Ownership Scheme (HOS) flats as their first step towards home ownership. In the past few years, different sectors of the community have also suggested to allow those with "White Form (WF)" status to purchase HOS flats with premium not yet paid to address their home ownership needs.
All along, tenants of public rental housing (PRH) can purchase new HOS flats put up for sale with a "Green Form (GF)" status without being subject to income limits, or HOS flats with premium not yet paid on the HOS Secondary Market. However, the non-PRH tenants who meet the income and asset criteria can only purchase new HOS flats put up for sale with a "WF" status.
Therefore, before the first batch of new HOS flats are completed in 2016-17, we will allow 5 000 "WF" applicants each year to purchase HOS flats with premium not yet paid (the interim scheme). This can help address the home ownership needs of those who are eligible and also facilitate the turnover of HOS flats in the interim, thereby revitalising the HOS Secondary Market.
The consolidated reply to the three-part question is as follows:
We have been monitoring the price changes in the property market closely, including the HOS Secondary Market. We note that despite the global and local economic slowdown, overall property prices have increased persistently, including the transaction prices of second-hand HOS flats. While we appreciate the community's concern about the increase in prices of second-hand HOS flats with premium not yet paid, it should be noted that changes in property prices hinge on many factors, such as land supply, volume of transactions, situation of mortgage lending, the level of liquidity, interest rates, people's expectation of the future market, etc. Likewise, changes in the prices of HOS flats with premium not yet paid on the Secondary Market are attributable to various factors, but not any single individual reason.
Under the HOS Secondary Market Scheme (SMS), eligible persons (i.e. those with "GF" status, and those with "WF" status who are allocated quota under the interim scheme in future) may liaise with the owners of flats with premium not yet paid under the HOS Secondary Market (including more than 250 000 HOS flats, 120 000 "Tenant Purchase Scheme" flats and 9 000 "Flat-for-Sale Scheme" flats under the Housing Society (HS)) on their own for purchasing those flats, and determine the transaction prices according to the market situation. As for those HOS flats with premium paid, they are regarded as private sector flats. We do not think that there is a need to set an affordable price level for second-hand HOS flats. Nevertheless, as in the past practice, the affordability of the "WF" applicants to home ownership would be reflected in the formula where the income and asset limits are set.
On the suggestion to restrict HOS flat owners to sell their flats to existing or prospective PRH tenants only and not on the open market upon paying the premium, in accordance with the Housing Ordinance, upon expiration of the alienation restriction period or if the Housing Authority (HA) does not accept the HOS flat owner's offer to sell back (i.e. the "buyback") within the alienation restriction period, the owners can sell their flats on the open market after paying premium. Therefore, in accordance with the Housing Ordinance, there are no grounds for the HA to restrict the owners from selling their HOS flats with premium paid on the open market.
That said, to address the community's concerns that the interim scheme may lead to speculative activities on the HOS Secondary Market which may affect the prices of HOS flats with premium not yet paid, we will introduce resale restrictions for "WF" buyers under the SMS. In the first two years after the transaction, "WF" buyers cannot sell their flats on the HOS Secondary Market. From the third year onwards, they can sell their HOS flats with premium not yet paid to eligible persons as certified by the HA. After the "WF" buyers purchase their flats, if they want to sell their flats on the open market, they need to pay the premium first.
The above resale restrictions for "WF" buyers on the HOS Secondary Market are made with reference to the resale restrictions currently applicable to HOS flats. This arrangement has been widely known to the public, easy to understand and is acceptable. Moreover, the Administration has put in place other measures (for example, the Special Stamp Duty) to curb speculation and should have addressed such concerns.
We understand that some people have been pressing home ownership needs. Therefore, in addition to the interim scheme of extending the HOS Secondary Market to a small number of "WF" buyers, the Government has proactively commenced the preparatory work for the first batch of new HOS projects. The Administration has set a planning objective to provide some 17 000 new HOS flats over the four years from 2016-17 onwards. We expect that the pre-sale of the first batch of new HOS flats, which will be completed in 2016-17, can be launched in 2014-15.
At the same time, the HA will also release all of the remaining 832 Surplus HOS flats for sale early next year. Also, the pre-sale of the 1 000 flats of the Tsing Luk Street project being developed by the HS, which was originally under the "My Home Purchase Plan", will be launched in end 2012.
Moreover, the Government will assess the demand for HOS in future, and set the relevant supply target under the "Long Term Housing Strategy" review.
Ends/Wednesday, December 5, 2012
Issued at HKT 12:00
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