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The following is issued on behalf of the Housing Authority:

Public housing tenants affected by the Housing Authority's (HA) Comprehensive Redevelopment Programme (CRP) will be given a subsidy to purchase 'transfer' block flats or Home Ownership Scheme (HOS) flats, under a new scheme endorsed by the Authority's Home Ownership Committee (HOC) today (Thursday).

The Mortgage Subsidy Scheme (MSS) will be implemented from HOS Phase 20A onwards. Tenants affected by CRP within three years are eligible to purchase HOS flats with this monthly subsidy which lasts for a period of six years.

"The scheme is one of the new initiatives announced in the 1998 Long Term Housing Strategy White Paper to help achieve the 70% home ownership target as the Chief Executive pledged in his Policy Address in 1997," a spokesman for the Authority said.

"Having regard to the price difference of various flat sizes and the affordability levels of affected tenants, two sets of subsidy rates will be introduced," the spokesman said.

For those purchasing one-bedroom, two- bedroom or three-bedroom flats, a total amount of $162,000 will be offered over six years. " They will be paid $3,000 every month for the first two years, $2,250 for the second two years, and $1,500 for the final two years," he said.

A subsidy of $81,000 will be given to the purchasers of small household flats -- $1,500, $1,125, and $750 monthly at 2-year intervals.

"To deter speculation, owners who resell their flats either to the HA or in the secondary market during the subsidy period are required to repay to the Authority the full amount of subsidy received," the spokesman said.

"This restriction will be lifted after the six years of subsidy," he added.

"Tenants paying market rents are not eligible for the mortgage subsidy but allowed to purchase the flats," he added.

A pilot scheme is selected in the Valley Road Estate CRP Phase 1 which is scheduled for clearance early next year. Two blocks comprising 300 units in the new estate at Homantin South Phase 1 are earmarked as transfer blocks for sale. Another block with 184 units is reserved to cater for additional demand of the tenants. Affected tenants will be invited to apply next month.

The spokesman stressed that sufficient rental units would be allocated to the affected tenants who opt to continue to rent.

The HOC today also approved the average selling prices of flats to be sold in the pilot scheme. Small household flats are sold at $578,400, i.e. $21,500/m2 Saleable Area (SA) or $1,150/ft2 Gross Floor Area (GFA). The average prices of one-bedroom to three-bedroom Harmony-3 flats range from $918,900 to $1,360,700, i.e. $23,500/m2 SA or $1,600/ft2 GFA.

The flats are priced on the basis of 50% discount rate. "Flexible discount options of 40% and 60% however will not be allowed as mortgage subsidies are given, "the spokesman said.

With the assistance of the MSS, most of the households will generally spend less than 40% of their total income in housing. The total housing cost to rent is kept at a ratio below 1.84 on average.

Flats which are not purchased by the Valley Road CRP Phase 1 tenants will be offered for sale to public housing tenants living in estates in the same district and are affected by CRP within three years with the payment of mortgage subsidy.

"Any unsold flats remained after these two rounds of sale arrangements will be put up for sale in regular HOS sale programme," he added.

End/Thursday, 23 July, 1998

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