LCQ8: White Form Secondary Market Scheme
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Question:
The Hong Kong Housing Authority (HA) launched the Interim Scheme of Extending the Home Ownership Scheme (HOS) Secondary Market to White Form Buyers (the Interim Scheme) in January 2013, which was subsequently regularised and launched as the White Form Secondary Market Scheme (WSM) since 2018. In this connection, will the Government inform this Council:
(1) of the following information since the launch of the Interim Scheme and WSM: (i) the number of applications, (ii) the number of Certificate of Eligibility to Purchase (CEP) issued (and its percentage in (i)), (iii) the number of Letter of Nomination (LN) issued (and its percentage in (ii) as well as the average monthly number of LN issued), and (iv) the number of completed transactions (and its percentage in (iii)), and set out in the table below a breakdown by (a) family applicants and (b) one-person applicants;
| Year of the Scheme | (i) | (ii) | (iii) | (iv) | |||||||||
| (a) | (b) | Total | (a) | (b) | Total (Percentage in (i)) | (a) | (b) | Total (Percentage in (ii)) | Average monthly number of LN issued | (a) | (b) | Total (Percentage in (iii)) | |
| The first Interim Scheme 2013 |
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| The second Interim Scheme 2015 |
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| WSM 2018 |
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| WSM 2019 |
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| WSM 2020 |
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| WSM 2022 |
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| WSM 2023 |
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| WSM 2024 (Ordinary Quota) |
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| WSM 2024 (Quota of "Youth Scheme (WSM)") |
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(2) of the percentage of completed transactions under WSM in the total number of flats with premium unpaid in the HOS Secondary Market in each of the past 10 years (set out in a table);
(3) of the number of Certificate of Availability for Sale issued by the HA, and the actual transaction volume of Green Form and White Form flats in the HOS Secondary Market in each of the past 10 years (set out in a table);
(4) of the policy basis and factors of consideration of the Government in determining the quotas for WSM in the past three years, and how such factors affected its decision in setting the quotas;
(5) as there are views that given the persistently low success rate in winning the WSM ballot drawing, whether the Government has considered further increasing the quotas for each WSM exercise, so as to further promote the recovery and turnover of public rental housing units and revitalise the HOS Secondary Market; if so, of the details; if not, the reasons for that; and
(6) as there are views that the decrease in the number of applications from around 78 000 in the previous WSM 2023 to some 34 000 in the latest WSM 2024 is due to the market overlap between HOS and private housing amidst the downturn of the property market, whether the Government has considered increasing the efforts in providing subsidies or optimising the existing home ownership ladder, including clearly defining the market positioning of HOS and private housing to avoid overlap in their target buyers and functions, thereby enhancing the attractiveness of WSM to eligible applicants; if so, of the details; if not, the reasons for that?
Reply:
President,
In response to the questions raised by Hon Gary Zhang, our reply is as follows:
(1) The Hong Kong Housing Authority (HA) has been striving to enhance the housing ladder by assisting low- to middle-income families to achieve home ownership through the sale of subsidised sale flats (SSF). Over the past 50 years, the HA has sold more than 500 000 SSF which provide citizens with solid support in achieving upward mobility.
The HA formally implemented the Home Ownership Scheme (HOS) Secondary Market Scheme in June 1997. It enables public rental housing (PRH) households and Green Form Certificate (GFC) holders to purchase flats sold under HOS/Private Sector Participation Scheme/Tenants Purchase Scheme, later it also includes flats sold under Green Form Subsidised Home Ownership Pilot Scheme/Green Form Subsidised Home Ownership Scheme (GSH). This arrangement enables owners to sell their flats in HOS secondary market with premium unpaid, thereby increases the turnover of SSF so as to satisfy the society's demand of SSF. More importantly, apart from providing more choices for PRH households and GFC holders to own a home, more PRH can be recovered by the HA for allocation to families with genuine need.
In response to the aspirations of low-to middle-income families for home ownership, the HA launched an Interim Scheme to extend the HOS Secondary Market to White Form buyers in 2013 and 2015, and endorsed in November 2017 to regularise the Interim Scheme as the White Form Secondary Market Scheme (WSM) with effect from 2018. Information on the number of applications, the number of Certificates of Eligibility to Purchase and the number of Letters of Nomination for each WSM exercise, broken down by family applicants and one-person applicants, is set out at Annex 1.
(2) to (5) The pricing of the HA's SSF is calculated on the basis of applicants' affordability, which is delinked from the private housing market and is affordable to the public. Under the current pricing mechanism, at least 75 per cent of the flats for sale can allow non-owner occupier households earning the median monthly household income to spend no more than 40 per cent of their monthly income on mortgage payment. Meanwhile, the discount rate for HOS flats is at least 30 per cent of the market price, while the discount rate for GSH flats will be 10 per cent higher than that of the previous HOS sales exercise, i.e. the discount rate is at least 40 per cent of the market price. Taking the last three HOS sales exercises as examples, the discount rates were 49 per cent, 38 per cent and 30 per cent respectively. The HA's SSF are sold to eligible persons at a price lower than the market value. To prevent speculative activities that would enable buyers to make profits from resale within a short period of time, the HA imposes alienation restrictions on the sale of SSF, and the discount rate enjoyed by owners at the time of purchase is also the basis for calculating the premium when the alienation restrictions are lifted. According to the most recent Public Housing Recurrent Survey, only about 3 per cent of owners of SSF intend to sell their flats. As SSF are mainly for self-occupation, most of the SSF (about 400 000 flats) which have passed the alienation period are with premium unpaid.
Before the launch of each WSM exercise, the HA will determine the quota for the next WSM exercise having regard to the transactions in the secondary market, the utilisation rate of quota in previous exercises, the overall economic environment, etc. The HA set the quota for WSM 2020, WSM 2022 and WSM 2023 at 4 500. Also, the Chief Executive announced in the 2024 Policy Address that the HA would increase the quota for WSM by 1 500 to assist young family and one-person applicants to achieve home ownership.
The HA from time to time review and enhance the arrangements for WSM:
(a) Enhancement of mortgage loan arrangements: the HA relaxed the mortgage loan arrangements for SSF in 2024, including extending the maximum mortgage default guarantee period for the secondary market from 30 years to 50 years, so that buyers can secure mortgage loans of a longer tenor. After the implementation of relevant arrangements and as of May 2025, the average number of transactions of second-hand SSF was about 360 per month, which was about 60 per cent higher than the average number of transactions of about 230 per month in the 12 months before implementation, representing a significant increase.
(b) Focus on assisting young people: we observed that, in the recent WSM exercises, around 80 per cent of both applicants and successful buyers were young people aged below 40. In view of this, the HA has introduced the Youth Scheme (WSM) in the latest exercise of WSM 2024 by substantially increasing the quota by 1 500 to 6 000 and allocating all of the 1 500 additional quotas to young applicants aged below 40 as directed in the 2024 Policy Address. As a matter of fact, among the applications received for WSM 2024, over 80 per cent came from young applicants opting to join the newly implemented Youth Scheme (WSM) showing that the scheme was well received by young applicants.
The number of Certificate of Availability for Sale issued by the HA, transactions in the HOS Secondary Market by Green Form and White Form buyers on a yearly basis in the past 10 years are set out at Annex 2. The relevant figures show that the aforementioned enhancement measures have successfully helped more and more low- to middle-income families to achieve their dream of home ownership. The HA will continue to monitor the utilisation of the quota and adjust the number of quotas in a timely manner.
(6) During the application period for WSM 2024, the HA received a total of around 34 000 applications. The oversubscription rate is about five times, reflecting the persistent strong demand for second hand SSF of citizens. The substantial increase of quota to 6 000 for the current exercise also means that applicants will have a higher chance of being successful in applying for WSM 2024.
WSM exercises in previous years (including WSM 2019, WSM 2020, WSM 2022 and WSM 2023) and the relevant HOS sales exercises adopted a joint application arrangement, under which the same application form was used for both schemes and applicants could choose to apply for HOS (i.e. to purchase first-hand HOS flats), WSM (i.e. to purchase SSF in the secondary market with premium unpaid) or both. However, as the application arrangements and target applicants for WSM 2024 are different from those of the previous joint applications for WSM and HOS, we cannot compare the number of applications of WSM 2024 with those of previous exercises.
In fact, SSF are positioned differently from private housing. SSF aim at assisting low- to middle-income families to purchase their own homes at lower price. At the same time, applicants of SSF are subject to asset and income limits and buyers are required to comply with the alienation restrictions, i.e. owners are not allowed to resell their flats before the expiry of the alienation restriction period and they can only resell and let the flats in open market after premium have been paid etc. From this, it is considered that the target applicants of SSF and potential buyers of private housing are different. We believe that members of the public will choose housing that suit them according to their own situation and purchasing power.
Ends/Wednesday, June 25, 2025
Issued at HKT 16:28
Issued at HKT 16:28
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