Explainer | Hong Kong sales plan for 2024 subsidised flats revealed, but is deal sweet enough to tempt?
7,132 subsidised flats up for grabs, with a 30 per cent discount, but both figures down on last year’s release
The Hong Kong Housing Authority, the city’s largest public home provider, on Tuesday approved the Home Ownership Scheme sales arrangement for this year with about 7,132 subsidised homes on offer at a 30 per cent discount on market values.
Applicants, including families with newborns or elderly members, will be given priority for the flats which are expected to be completed between this year and 2027.
Here the Post looks at the pricing mechanism and the attractions of the subsidised flats up for sale.
1. How attractive are the homes?
There will be 7,132 new subsidised flats offered under the Home Ownership Scheme this year, with a 30 per cent discount on market prices.
They will cost between HK$1.43 million (US$183,400) and HK$4.67 million.
The size of the flats – to be built on five sites including Kowloon’s Kwun Tong, Kai Tak and Yau Tong, as well as Tuen Mun in the New Territories and Tung Chung on Lantau Island – will range from 186 to 510 sq ft.
The number of subsidised homes, as well as the discount, were down this year compared to 2023, when a total of 9,154 subsidised flats across six sites in Kai Tak, Kwun Tong, Tuen Mun and Yuen Long were put on the market with a 38 per cent discount.
2. How is the discount rate fixed?
The pricing method for subsidised housing was revised in 2018 in favour of discounts based on a family’s budget and affordability.
Authorities under the changed system use the median monthly household income of households with no owner-occupier status instead of the income limit of “white form” applicants – prospective buyers living in private flats who do not get housing subsidies – to assess affordability.
Authorities want to ensure at least 75 per cent of flats – instead of 50 per cent – will be affordable to eligible buyers.
3. How affordable are the flats compared with others?
The price of the subsidised flats at Kai Tak offered with a 30 per cent discount on market prices run from HK$1.43 million to HK$4.67 million, with a suggested average selling price per sq ft of HK$9,230.
That is considerably lower than that of the Pavilia Forest I project in the same district, where the first 60 flats were offered at HK$16,008 per square ft.
The latest release of subsidised flats at Kwun Tong will go for an average of HK$7,020 per sq ft and at Yau Tong for HK$7,610 per sq ft.
4. How big are down payments compared to elsewhere?
The Housing Authority offers subsidised flats to eligible households with a down payments of five to 10 per cent. Successful applicants can then apply for a mortgage from banks backed by a government guarantee.
Singapore reviewed its latest loan-to-value ratio for the sale of public housing from a maximum of 80 per cent to 75 per cent last week, which means purchasers need to pay more as a down payment.
5. Will the flats be popular in the present market?
Lawmaker Scott Leung Man-kwong, a lawmaker, said this year’s release was attractive this year and that the flats would meet the expectations of the public.
He added that most flats were easily accessible, especially the ones at Kai Tak.
“I believe that those flats in the urban areas would be popular,” Leung said.
He added that total supply also met society’s expectations.
But lawmaker Chan Hok-fung predicted the discount rate would be a disappointment to potential buyers.
“The discount offered is a bit less compared to last year,” he said.
Chan added that the cut in supply might slow people’s upward mobility.
