Bid to break chains of Hong Kong housing market as way to boost ownership
Scheme from Our Hong Kong Foundation would lower premiums homeowners of subsidised flats must pay by removing market inflation factor
Owners of subsidised flats may not have to pay a high price to fully privatise their properties under a pilot scheme proposed on Monday that echoes the vision of Hong Kong’s leader to boost home ownership.
Our Hong Kong Foundation, a think tank founded by former chief executive Tung Chee-hwa, suggested the premium that subsidised flat owners needed to pay the government to be able to sell or let out their properties should not be linked with market inflation.
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Stephen Wong Yuen-shan, head of public policy at the foundation, said subsidised flat owners under the existing system only co-owned their flats with the government, and skyrocketing property prices meant unaffordable premiums, rendering full ownership of the flats almost impossible.
“The key of our proposal is that the premium is no longer linked with the property market, so it will not keep rising infinitely,” Wong said. “We don’t want the government to also benefit from the increase in a flat’s value even after it sells the flat.”
The premium – reflecting the difference between the market price and the subsidised price – needs to be paid before an owner can sell a flat in the private market and reap the benefits of full ownership.
For example, if a subsidised flat priced at HK$5 million is sold at a price about 30 per cent off the market value, the buyer only needs to pay HK$3.5 million, with a HK$1.5 million difference.
