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Tenants Purchase Scheme Phase 6A flat prices within tenants' affordability


The following is issued on behalf of the Housing Authority:

The Housing Authority (HA)'s Tenants Purchase Scheme (TPS) Phase 6A will be offered for sale once the drainage survey and necessary repair works are completed. Based on the current works progress, around 5,100 public housing units in Cheung Wah Estate, Fanling, will be first put for sale by the end of this month. The sales plan was announced last year.

The three remaining TPS Phase 6A estates including Lei Tung Estate, Po Lam Estate and Shan King Estate will be sold by stages in the ensuing months.

The flats are thought to be affordable to sitting tenants as the list prices of 99% of the flats are below HK$300,000 and the purchasers will be spending no more than 1.12 times of their current expenses on housing on average.

HA's Subsidised Housing Committee (SHC) endorsed today (June 2) the sales plan of Phase 6A, the list price of which is set at a discount of 60% off the assessed market value. An additional special credit at 30% of the list price will be offered to tenants who buy their flats within the first year. A credit at 15% will be offered in the second year.

Chairman of the SHC Mr Ng Shui-Lai said, "Tenants' affordability has always been our guiding principle in determining the TPS flat prices. The guideline also ensures that the tenants will not be spending more than double the rent they are paying after the purchase."

"With the first year full-credit, the sale prices range from about $57,000 to $311,000. The average monthly housing expenditure of the families buying the Phase 6A flats will be no more than 1.12 times of the current rent they are paying. These expenses already have the rates, government rent, management fee and mortgage payment included. The ratio is the lowest compared to those of the previous phases. We believe that our tenants will find the flats affordable," he added.

Although the four estates under Phase 6A will be launched by stages depending on the completion date of the condition survey and necessary repair works of the drainage system, SHC members agreed to assess the list prices in one go.

"To be in line with the arrangement for the previous TPS phases, a uniform sales discount and special credit will be adopted under Phase 6A. Given fluctuations in market values and the construction costs, the price assessments for these four estates, if determined separately, may result in substantial variations in the price level, discount and special credit," Mr Ng explained.

Similar to previous arrangements, the HA will inject $14,000 per flat into a Maintenance Fund for each of the Phase 6A estates, providing adequate reserves for major maintenance works for the next 10 years.

Mr Ng anticipated that the launch of Phase 6A would not have any real impact on the property market as the sale of Phase 6A was made known a year ago. He believed that the market should have taken full account of the upcoming sale. Moreover, the sale is restricted to sitting tenants who should not be a major sales target group for private sector properties.

Ends/Wednesday, June 2, 2004


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