Immediate Announcement of Resumption of HOS

Hon KP Chan on Immediate Announcement of Resumption of HOS:

•    The community is reaching a consensus in the necessity of resuming the Homeownership Scheme (HOS).  Of course, the Government is fully aware of the situation.  The Chief Executive says that the matter is under review and details would be disclosed in his Policy Address in October.  Citing anonymous sources, there are media reports that the Government is inclined to resume HOS.

•    I agree that resumption of HOS is the wish of the majority and in the interest of Hong Kong.  It is likely that the Government would accede to public aspiration.  However, as the Motion says, there are lot of details to consider like land supply, quantity, allocation and pricing, etc.  If we go ahead without these substantial details, we would trigger another round of controversies.  With the recent conclusion of the second round of quantitative easing (QE2) in America, the financial market might be volatile in the short-term.  If there were substantial outflow of hot money, the local property market would be adversely affected.  In turn, the details of HOS programme might require reconsideration and handled with care.

•    In my view, therefore, if the Government already has formulated a plan, it should be made public the earlier the better.  If the Government is still formulating its plan, I would rather await the Policy Address.  Once the programme is finalized, we would urge the Government to dispose of red tapes and commence work early, so that we could still achieve the aim of completing the first batch of resumed HOS early.

•    Another question is quantity and pricing of HOS.  Some Members propose to delink pricing with the market and rebase it on affordability of eligible buyers and construction costs, etc.  Resale restrictions should also be imposed.  Such proposals might not be practicable.  In Hong Kong, homeownership is also an investment, apart from accommodation.  These proposals would reduce the incentive for homeownership, particularly rental housing tenants or “green form” applicants.  Would they buy a residential unit that is restrictive in terms of asset preservation?  A better way is to adjust the discount rate to meet affordability of those who are eligible.

•    We need more facts and figures to consider the question of quantity and land in depth.  I do not think the Government has released sufficient information at this stage.  If the supply is too little, it would not serve its purpose of assisting homeownership.  If the supply is too much, it would impact adversely on the housing market and risk recurrence of the 85,000 incident, not to mention land unavailability.

•    On the other hand, I support the conversion of land earmarked for “My Home Purchase Plan” for HOS.  To the general public, “My Home Purchase Plan” is still an uncertainty.  Such conversion would help resume HOS programme early.

•    Last but not least, I support the public housing policy of “rental-primary, ownership-secondary”.  As we resume HOS, we should also increase public rental housing to meet housing demand of the grassroot.  Meanwhile, HOS would encourage affordable tenants to become homeowners and surrender their units for reallocation.  Thus, HOS would help increase supply of public rental housing.

•    Housing is the primary cause for concern in Hong Kong.  Nowadays, the property market would seriously impact Hong Kong no matter housing prices go up, go down or even remain on hold.  I wish the incumbent Government would have the courage to defuse this catastrophic “bomb” during its remaining term of office.

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