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Following is a question by the Hon Leung Kwok-hung and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (October 9):
Question:
Quite a number of members of the public have complained to me that despite the introduction of a series of measures to cool down the overheated property market in the last two years by the Government, the prices and rents of private residential flats have not dropped. Moreover, quite a number of recipients under the Comprehensive Social Security Assistance (CSSA) Scheme have also complained to me in tears that the rent allowance they received from the Social Welfare Department was insufficient to cover the rent of a unit in subdivided flats (commonly known as a "subdivided unit"), forcing them to sleep underneath flyovers. In this connection, will the Government inform this Council:
(a) whether it knows the respective current numbers of street sleepers in the District Council districts in Hong Kong;
(b) given that some members of the public have pointed out that the prices and rents of private residential flats have not dropped after the introduction of a series of measures to cool down the overheated property market by the Government, whether it has assessed if the current prices and rents of private residential flats have already reached a level beyond the affordability of members of the public, and if such a situation is due to the Directors of Bureaux or government officials concerned misjudging the circumstances and making a series of mistakes in housing policy; if the assessment result is in the affirmative, whether it will hold the Chief Executive and Directors of Bureaux concerned politically accountable and require them to step down; if the assessment result is in the negative, of the reasons for that; and whether the Government has evaluated by how much the current property prices and rents should further rise before they are considered unreasonable; if it has, of the results;
(c) whether it knows the average monthly rental per-square-foot for subdivided units in buildings with lifts in Sham Shui Po, Kwun Tong and Kowloon City districts at present; and
(d) of the number and percentage of CSSA recipients receiving rent allowance at present; whether it has assessed if the current rent allowance provided to single or elderly CSSA recipients is sufficient to cover the rentals for private residential flats; if the assessment result is in the affirmative, of the size of flats that those recipients can afford to rent in the districts mentioned in (c) with the current rent allowance; if the assessment result is in the negative, whether it will raise the amount of rent allowance?
Reply:
President,
The Government's housing policy objectives are to assist grassroots families to be rehoused to public rental housing (PRH) to meet their basic housing needs; assist the public to choose accommodation according to their affordability and personal circumstances; provide subsidised home ownership flats on top of PRH so as to build a progressive housing ladder; and maintain the healthy and steady development of the private property market, with priority to be given to meet Hong Kong permanent residents' needs in the midst of tight supply.
With inputs from the Labour and Welfare Bureau and the Rating and Valuation Department (RVD), my reply to the four-part question asked by the Hon Leung Kwok-hung is as follows:
(a) In accordance with the Street Sleepers Registry maintained by the Social Welfare Department (SWD), there are 674 street sleepers locating at various districts across the territory as at August 31, 2013. Breakdown by districts is at Annex A.
(b) The exuberant housing market in recent years reached a level of irrational exuberance last year. For the private residential property prices, in the first ten months of 2012, the overall rise in property prices increased for 24%, representing a substantial increase of 114% comparing to the low price of 2008. The announcement of the enhanced Special Stamp Duty and the introduction of the Buyer's Stamp Duty in end-October 2012 had an immediate and significant cooling effect on the property market and the rising trend slowed. There was an increase of 26% in 2012. However, in early 2013 the property market showed signs of a return to exuberance, and there was an average monthly increase of 2.7% in the first two months of 2013. Upon the roll-out of a new round of demand-side management measures in mid-February 2013 (i.e. the ad-valorem stamp duty was doubled), the housing market started to cool down substantively. At present, the property market is static, with the overall property prices movement being a very moderate 0.4% rise per month on average for March to August 2013.
The two rounds of demand-side management measures are effective in general. If the Government had not introduced these measures, the private housing market would have risen irrationally and this would increase the risk of asset bubbles. Given the global environment of low interest rates and ample liquidity, some major cities are also facing similar impact from housing market exuberance. Therefore, we must not slacken, and scrap or refine the measures easily.
The Government has been closely monitoring the development of the rental market for private residential properties and the trend of rental levels. There was an increase of 11.3% in 2012. In 2013 (as at August 2013), there was a further increase of 2.7%. The rents for private residential properties are subject to various factors including the supply and demand of rental flats, the property market sentiment, and macro-economic environment, etc. In order to tackle the tight supply and demand situation of the residential property market at source, we fully recognise the need to increase the supply of housing and that means making available more land for housing development. The recently-published Long Term Housing Strategy consultation document proposed the future strategic direction, including increasing the PRH production significantly so as to alleviate the hardship of the grassroots on housing.
The community (including some Legislative Members) suggested re-introducing rent control to curb rental increase. However, the Government is concerned that introducing these measures may immediately discourage landlords from letting out their premises, thus reducing the supply. In addition, landlords may increase the rental level upfront when the tenancy is entered in order to minimise the impact of the rent control in future. Under the current circumstances of tight supply, these measures are not to the advantage of persons with housing needs.
(c) The RVD and the Census and Statistics Department do not analyse the rental information for sub-divided units in buildings with lifts in Sham Shui Po, Kwun Tong and Kowloon City districts. However, according to the RVD's provisional figures as at August 2013, for the Class A (Note) small-sized private domestic units as a reference, the average monthly rents for the three districts (viz. Cheung Sha Wan (including Sham Shui Po), Kowloon City and Wong Tai Sin, and Ngau Tau Kok and Kwun Tong) were $287, $228 and $248 per square meter respectively.
(d) Rent allowance is provided to eligible households to meet accommodation expenses under the Comprehensive Social Security Assistance (CSSA) Scheme. The amount of the allowance is the actual rent paid or the prescribed maximum level of rent allowance (MRA) set in accordance with the number of members in the household who are eligible for CSSA (see Annex B), whichever is the less. The Director of Social Welfare may exercise discretion to grant a rent allowance higher than the appropriate MRA to those CSSA households who are living in private housing but awaiting for compassionate rehousing or subsidised residential elderly institutions to cover their actual rent paid. As at June 2013, there were 251 158 CSSA cases. 232 586 CSSA cases (including those living in residential institutions) received rent allowance. Amongst them, 146 472 cases (63%) were living in PRH and 34 598 (15%) lived in private housing. At present the MRA could fully cover the actual rent paid by the majority of CSSA households living in PRH (98%) and 48% of those living in private housing. SWD does not have any information regarding the rental area of relevant private housing.
The Government adjusts the MRA annually in accordance with the movement of the Consumer Price Index (A) rent index for private housing. SWD has increased the MRA by 5.7% and 7.8% in 2012 and 2013 respectively.
Following its first launch in October 2011, the Community Care Fund decided in September 2013 to re-launch the assistance programme "Subsidy for CSSA Recipients Living in Rented Private Housing", which aims to provide a one-off payment to CSSA households living in private housing and paying a rent exceeding the MRA under the CSSA Scheme, so as to relieve their financial burden in face of periodic rent increase. Each eligible one-person and two-or-more-person CSSA household will be provided with a one-off subsidy of $2,000 and $4,000 respectively. About 17 000 CSSA households are expected to benefit from this assistance programme.
Note: Class A units refer to independent dwellings with saleable area less than 40 square meter, as well as separate cooking facilities and bathroom (and/or lavatory).
Ends/Wednesday, October 9, 2013
Issued at HKT 14:45
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