HK asset limits raised for secondary HOS buyers

The Housing Authority's Subsidized Housing Committee increased income and asset limits for purchases of the Home Ownership Scheme units on the secondary market, widening the population base of those eligible to apply to purchase.

The income ceiling for households with two or more members has been increased to HK$40,000 ($5,161)?per month and the asset ceiling lifted to HK$830,000. For single applicants, the income limit goes up to HK$20,000 a month, while the ceiling on assets has been raised to HK$415,000.

The announcement came as the HA prepares to go ahead with the plan to sell 5,000 second-hand residential units next year under the HOS. White-form applicants - those who currently live in private housing - will be able to purchase the flats without being required to pay the unpaid land premiums.

Speaking after the committee meeting on late Thursday afternoon, Committee Chairman Stanley Wong said the revised income and asset limits were worked out in accordance with an established formula. Although the revised limits will increase the number of applicants, he said it would not diminish chances of low-income people to purchase a home.

"If there are a lot of people applying, their chance of getting allotted will of course decrease," he said. "But no matter whether they are high or low earners, their chances of winning an allotment are the same. Therefore those getting the allotments are not necessarily high earners."

Wong reiterated that the purpose of the scheme is to provide those who are unable to afford private housing a chance to buy homes during this interim period before new HOS units are completed in 2016 or 2017. Whether property prices will rise or fall as a result of the plan was not taken into consideration.

Committee member Michael Choi disclosed that the committee almost unanimously approved the revised income and asset limits. In view of surging property prices and high-riding inflation, he said it was necessary to raise the limits. "People who earn HK$20,000-strong find it hard to buy flats in the private market, but so do those earning around HK$30,000. Therefore the government needs to help both categories of people."

Choi said he has no fears that the scheme will drive up property prices. The supply is limited to 5,000 flats over two phases, regardless of the number of applicants, he said. And after the extension of the special stamp duty and introduction of the buyer's stamp duty on Oct 26 to cover sales of private residences to offshore buyers, the number of property transactions over the past month has dropped by 50 to 60 percent.

"So I believe when this scheme is launched in January, there will be room for downward adjustment of property prices and that will be the time for genuine home buyers aiming at self-use," he commented.

joseph@chinadailyhk.com