Following is a question by the Hon Kenneth Leung and a written reply by the Deputy Chief Secretary for Administration, who is undertaking the duties of the Secretary for Housing, Mr Cheuk Wing-hing, in the Legislative Council today (July 30):
 
Question:
 
     In recent years, the current-term Government has actively encouraged young people to move up the housing ladder and has put in place a number of measures to assist young people in home ownership. In this connection, will the Government inform this Council:
 
(1) among the applicants for the White Form Secondary Market Scheme 2024 (WSM 2024), of the number of young applicants under the Youth Scheme (WSM) and their percentage, with a breakdown by age group (i.e. aged 18 to 29 and aged 30 to 39);
 
(2) out of the 6 000 quota under WSM 2024, of the number of those ultimately allocated to applicants aged under 40; whether the authorities will further increase the quota for the Youth Scheme (WSM) in the light of the response received and the demand of young people for home ownership;
 
(3) whether it has compiled statistics on the respective numbers of applications for 80 per cent and 90 per cent loan-to-value (LTV) mortgage loans under the Mortgage Insurance Programme (MIP) in each of the past five years, and the respective percentages of such numbers in the total number of new mortgage loans approved each year; among the applicants for 80 per cent and 90 per cent LTV mortgage loans, of the number of young applicants aged under 40;
 
(4) given that the HKMC Insurance Limited (HKMCI) announced in August last year a new arrangement, in which a waiver of the owner occupancy requirement under MIP will be granted to an eligible homeowner (such as a homeowner's family expecting newborn(s), resulting in a change in housing needs) for renting out the property, whether the Government knows if HKMCI will consider enhancing such measure (such as expanding the eligibility criteria from families with newborn(s) to include families with young child or children as well), thereby enabling more young families to change residence based on family needs;
 
(5) as it is learnt that some young families who previously acquired mortgage loans with a high LTV ratio through MIP find it difficult to replace their properties due to property price adjustments, and some even find themselves in negative equity, thus affecting their life planning, whether the Government has conducted surveys and studies, compiled statistics, and monitored on how such situation has impacted young families, and taken timely measures to prevent the problem from worsening; and
 
(6) whether it will further assist young people in home ownership under the subsidised housing policies, such as adjusting the proportion of subsidised housing supply, extending the Youth Scheme to subsidised housing provided by the Hong Kong Housing Society, and increasing the annual number of applications that can be made for subsidised housing and the proportion of larger flats available, thereby making subsidised housing an important channel for young people to purchase their first home?
 
Reply:
 
President,
 
     Since taking office, the current-term Government has actively implemented multiple measures to "enhance speed, quantity, efficiency and quality" in public housing supply. With our unremitting efforts, the problem of back-loaded public housing supply has completely turned around. Coupled with 30 000 Light Public Housing units, the total public housing supply in the coming five years (i.e. 2025-26 to 2029-30) will reach 197 000 units, which is 85 per cent higher than that of the first five year period since the current-term Government took office (i.e. 2022-23 to 2026-27), providing a solid foundation for citizens to live and work in contentment. The Hong Kong Housing Authority (HA) has also been striving to enhance the housing ladder by assisting low- to middle-income families to purchase their own homes through the sale of subsidised sale flats (SSF), and encouraging them to move up the housing ladder as appropriate according to their own affordability.
 
     We notice that many young people are working hard to achieve upward mobility through accumulation of experience and savings. Among buyers of various types of SSF, young people under the age of 40 have always been the majority. For instance, nearly half of the successful applicants for first-hand Home Ownership Scheme (HOS) flats are under the age of 40. Around 80 per cent of applicants and buyers under the White Form Secondary Market Scheme (WSM) are also young people under the age of 40. In fact, the selling prices of SSF are affordable for young people. Taking HOS 2024 as an example, after applying the affordability benchmarks calculation, the flats are sold at around 70 per cent of the market price. Based on the average selling price, a flat of about 380 square feet in saleable area costs only around $2.7 million. As the HA provides a mortgage default guarantee for buyers of SSF, generally, White Form buyers can secure a mortgage loan at 90 per cent of the flat price. Assuming an interest rate at 3.5 per cent and a 30-year mortgage term, young people would only need to make a down payment of about $270,000, with monthly mortgage payments of $10,900, to become homeowners.
 
     To further assist young people, the HA has introduced a series of measures to facilitate their flat purchase. First, starting from the next HOS sale exercise, the HA will allocate an extra ballot number to young family and one-person applicants aged below 40 with White Form status. As for the secondary market, starting from WSM 2024, the HA has increased the quota to 6 000 by 1 500, all of which will be allocated to young family and one-person applicants under the age of 40.
 
     Meanwhile, the Hong Kong Housing Society (HKHS), as a close partner of the Government in housing policies, also fully supports the Government's relevant housing initiatives in helping young people realise their home ownership aspirations, including the allocation of an additional ballot number to White Form young family and one-person applicants aged below 40 for the purchase of SSF. The HKHS will continue to make reference to the relevant arrangements of the HA and actively work towards the same.
 
     In addition, the Government also assists those higher-income persons who are not eligible for HOS and yet cannot afford private housing to achieve their home ownership aspirations through Starter Homes for Hong Kong Residents (SH) projects. Apart from the first two SH projects offered for sale by the Urban Renewal Authority (i.e. eResidence Towers 1 and 2, as well as eResidence Tower 3) with a total of over 600 SH units sold, the Government is also taking forward a few other SH projects, which will provide a total of around 5 000 SH units from the next few years onwards. Amongst applicants and final purchasers of SH units offered for sale in the past, around 85 per cent were youth aged 40 or below.
 
     Besides providing various types of subsidised housing, the Government has also implemented other measures to assist citizens in home purchase. The current-term Government has since February 2024 abolished all demand-side management measures for residential properties. The Hong Kong Monetary Authority has also since October 2024 adjusted the countercyclical macroprudential measures for property mortgage loans. The maximum loan-to-value (LTV) ratio and debt servicing ratio (DSR) limit were reverted to the pre-2009 levels before the countercyclical macroprudential measures were first introduced, with the maximum LTV ratio for all residential properties adjusted to 70 per cent, regardless of the value of the property, and the DSR limit adjusted to 50 per cent, providing facilitation to persons with different needs for property purchase. Individuals may also obtain high LTV ratio mortgage loans through the Mortgage Insurance Programme (MIP) according to their own needs. In particular, for first-time homebuyers with regular income purchasing properties priced at $10 million or below, the LTV ratio can be up to 90 per cent, which greatly reduces their down payment burden. Meanwhile, to provide comprehensive support for citizens and young people who have aspirations in purchasing flats, the Government has since February 26, 2025 adjusted the value bands of Ad Valorem Stamp Duty payable for sale and purchase or transfer of residential and non-residential properties, raising the maximum value of properties chargeable to $100 stamp duty from $3 million to $4 million. As for SSF, since most units are priced below $4 million (taking HOS 2024 as an example, the average selling price is around $2.7 million), buyers may thus benefit from the aforementioned reduction in stamp duty to $100, with savings to nearly $60,000.
 
     In consultation with the Financial Services and the Treasury Bureau, our reply to the questions raised by the Hon Kenneth Leung is as follows:
 
(1) During the application period of 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. Among all of the applications received, 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 the young applicants. Regarding the number and age distribution of young applicants who opted for the Youth Scheme (WSM) under WSM 2024, please refer to Annex 1.
 
(2) Balloting for WSM 2024 was conducted in April 2025. The HA expects that approval letters will be issued to successful applicants in the third/fourth quarter of 2025. Within the specified period, holders of the approval letters may apply for Certificate of Eligibility to Purchase (valid for 12 months) to purchase a SSF with premium unpaid. The HA will continuously monitor factors including the quota utilisation, demand for SSF, overall market conditions, etc, to make timely adjustments to both the total number of quota and the allocations under the Youth Scheme (WSM).
 
(3) The MIP is administered by the HKMC Insurance Limited (HKMCI) for promoting home ownership in Hong Kong. When approving residential mortgage loans, banks have to comply with LTV requirement on owner-occupied residential mortgage lending, which is currently set at 70 per cent. With the MIP providing mortgage insurance to banks, banks can provide mortgage loans with higher LTV ratio (i.e. above 70 per cent) without incurring additional credit risk. As long as an application meets the relevant eligibility criteria, the bank can generally provide a mortgage loan of up to 80 per cent LTV ratio under the MIP. For first-time homebuyers with fixed salaries, the maximum LTV ratio can even reach 90 per cent, substantially reducing the down payment burden for homebuyers.
 
     The numbers of new loans drawn down under the MIP in the past five years (categorised by LTV ratio), and their respective proportions to the total number of new loans drawn down (i.e. figures in the brackets) are set out at Annex 2.
 
     Among above new loans drawn down, the numbers of cases involving at least one homeowner aged below 40, and their respective proportions to the total number of new loans drawn down (categorised by LTV ratio) (i.e. figures in the brackets) are set out at Annex 3.
 
(4) In August 2024, the HKMCI put in place a new arrangement under the MIP to approve on a case-by-case basis eligible homeowners' applications for renting out their self-occupied properties, so as to help them meet their special needs arising from changes in personal or family circumstances (new arrangement). The new arrangement has been implemented for around one year smoothly, offering substantial assistance to homeowners with special needs. Under the new arrangement, in addition to the situation that the homeowner's family is expecting newborn(s)/adopting child or children or the homeowner has become unemployed, any homeowner who has other special needs and has been residing in the relevant property for not less than 12 months may also submit an application to the HKMCI through a bank for renting out the self-occupied property. The existing mechanism already allows homeowners who have young children and are able to meet the self-occupancy requirement to submit applications for renting out their self-occupied properties based on their special needs. The HKMCI will consider approving the relevant applications on a case-by-case basis.
 
(5) The objective of the MIP is to promote home ownership and provide citizens with an additional option for financing. As the fluctuation of the property market is subject to various factors, citizens should take into consideration their needs for home ownership and repayment capability, and assess the risks carefully.
 
(6) As mentioned above, both the HA and the HKHS are making relentless efforts to optimise various arrangements to help young people with home ownership aspirations strive to climb onto the home ownership ladder. The Chief Executive announced in the 2024 Policy Address that the HA would adjust the ratio between public rental housing (PRH) (including Green Form Subsidised Home Ownership Scheme flats) and SSF from 7:3 to 6:4 in order to increase the supply of SSF. In the next five years (i.e. 2025-26 to 2029-30), the HA and the HKHS will complete about 56 500 SSF. Meanwhile, the HA is implementing the arrangement announced in the 2022 Policy Address regarding the minimum floor area for new flats. The saleable area of all SSF completed from 2026-27 onwards will be no less than 26 square metres in general. Furthermore, in the latter part of the coming decade, we will reserve 10 per cent increase in floor area for public housing. We are also exploring other measures to further assist young people in purchasing SSF and the measures will be launched in a timely manner. That said, we would like to take this opportunity to appeal to young people once again to unleash their potential and create a more prosperous future, but not to limit their room for development just for the sake of meeting the eligibility criteria for PRH application. In the past five years (i.e. 2020-21 to 2024-25), the average age of non-elderly one-person applicants that were housed to PRH was 57 years old. After understanding the above opportunities and support provided by the Government for young people, young people should plan ahead of time so as to climb higher up the housing ladder.

Ends/Wednesday, July 30, 2025
Issued at HKT 18:05

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