Enhancing the My Home Purchase Plan

Speech by Hon KP Chan on Motion on Enhancing the My Home Purchase Plan (Synopsis) 

•    Hong Kong’s property prices have surpassed the 1997 level to reach a historic high. Whether property prices continue to rise or drastically fall, social instability may arise in Hong Kong. When property prices plummet rapidly, citizens who have bought properties at the currently high prices will end up with negative equity. I believe the Government should embrace a more open and active attitude to handle the housing problems.

•    To curb the rising trend of property prices, the Government has implemented several decisive and bold measures, including policies to crack down on property speculation and increase land supply. Although they have not brought rising property prices to a complete halt, these policies have been effective to some extent. However, the Government has not actively addressed public views and feedback on housing issues such as Public Rental Housing (PRH), Home Ownership Scheme (HOS) and “My Home Purchase Plan”. Today, the Motion and Amendments raised by various Legco Members reflect the problems of housing policies that deserve the Government’s careful attention.

•    “My Home Purchase Plan” has been developed by the Government in response to public demands for rebuilding HOS flats. It remains to be seen if it is feasible and could meet the needs of citizens. However, there is considerable feedback in society that the Scheme is inadequate. This includes suggestions raised by various colleagues, regarding the number of housing units, their launch time, housing discounts, resale restrictions and whether only Hong Kong citizens should be allowed to purchase them. By and large, I agree that the “My Home Purchase Plan” is inadequate. I also concur with most of the recommendations by my colleagues. I hope the Government could seriously look into them and finetune “My Home Purchase Plan.”

•    It is my longstanding position that the Government should seriously consider resuming the construction of HOS units, not to bring down private housing prices, but to improve the living conditions of eligible grassroots citizens who find private housing unaffordable. In particular, PRH residents with green forms submission are required to surrender their rental apartments after successful purchase of HOS units. This will help cut the queuing time for Public Rental Housing. I also believe the Government should speed up the construction of PRH units, enabling grassroots citizens currently living in deplorable conditions to be allocated housing as soon as possible, so as to alleviate the increasing social discontent.

•    I believe we need to exercise caution in considering the suggestion of re-launching the Tenants Purchase Scheme (TPS) raised by some Legco members. The Government has drastically raised the income ceiling for PRH application. Yet, it is still maintaining its targets of building 15,000 PRH units and retrieving over 10,000 PRH units every year. An increase in demand but not in supply may adversely affect

•    the target of a three-year waiting period for PRH applicants. If the Tenants Purchase Scheme is re-launched, the numbers of retrieved PRH units may decline, which makes it even more difficult to achieve the target of the three-year waiting period. Besides, the prices of TPS units are ultimately based on market prices. Despite the price discounts offered, property prices are currently on a historic high. This may bring more disadvantages than benefits to PRH buyers should mortgage rates increase drastically while property prices fall in the future.

•    Increasingly more Mainland residents have come to Hong Kong to buy apartments in recent years. According to news coverage, the number of Mainland customers now makes up 20 to 30 percent of the buyers in all. This situation is alarming. The trend of Mainland citizens purchasing apartments in Hong Kong is here to stay. Besides the wealthy ones who like investing in Hong Kong real estate, some 30,000 to 40,000 mainland pregnant women arrive in the city each year to give birth. Some of their Hong Kong-born children will eventually return to study and live here. Since they are generally from an affluent family background, it is only natural that they will want to purchase properties in Hong Kong. This will certainly stimulate demand for housing. The Government should therefore reassess the needs for local housing as soon as possible and draw up revised land supply plans accordingly, in order to resolve the long-term problems arising from property prices.

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