測量師時代 SURVEYORS TIMES

Issue: 2011.11

New HOS Proposals, A Puzzling Enigma

The new Policy Address, as very much expected, put in a lot of stress on housing and land issues. However, to the disappointment of quite some people, there was no slightest hint of a long-term blueprint of standard of housing, quality of living and land supply for Hong Kong people in the future. Neither is a target on how much improvement in living space, quality of environment in the next decade or so.

The most baffling of all is the new HOS plans. Only 17000 flats would be built in a four year period, which is way below the number of current eligible applications. Households including young families wishing to own their homes but are unable to afford buying in the private market are well over 100,000. It is puzzling how the government came up with the number of flats to build. Some media have compared the keen competition in purchasing a new HOS flat to the Mark Six lottery, which is sadly not far off the mark. It is not surprising that some families might deliberately reduce their household income to fall within eligibility. A working couple earning just over HK$30,000 a month would be very much tempted for the wife to resign in order to participate in this “lottery” game for 「Big Win」!

Whereas it is accepted that the government is obliged to assist those families who could not afford to purchase property for a decent living space in the private market, this does not mean providing an avenue for investment and profit making. Under the new 「Premium Payment」 arrangement which substitutes loan for premium, new HOS flat owners only have to repay the subsidies provided at purchase, instead of premium assessed based on the prevailing market condition at the time of sales. Such change gives people an impression that instead of assisting home ownership the new HOS flat seems like an IPO listing at bullish times when everyone can make a sure quick buck.

The government believes that with the new HOS arrangement it would provide incentive to flat owners to purchase private housing, thus eventually increasing mobility and flat availability. But the more obvious result would be these HOS flats would then be channeled into private housing market, reducing the number of HOS flats. For those owners who sell their HOS flats they would have to buy from private housing market, increasing demand and accelerating price hike. What the government should do is to eradicate the shortage of flats in the market!

It is the government stated housing policy that its goal is to assist and encourage people to save and buy their own homes. However, most people would consider the new HOS as a tool for profit making. The new policy will not encourage saving for upward social mobility, but be looked as an accelerant to property speculation. If the disparity of wealth is not improved, the needs for government-assisted housing would continue to rise, and there will be increasing pressure on public coffers to building more public housing including HOS flats. It may therefore be advisable for the administration to buy back HOS flats from those with an ambition to move upward to the private market. Should this be adopted the government will not receive premium from HOS sellers, but there will be less pressure to provide suitable land and substantial funding to building new HOS flats to meet the ever-mounting demand.

The new HOS arrangement, regarded as to promote “Get rich by buying a HOS flat”, would also be welcomed by property developers. The number of new supply is not substantial and thus would have little adverse effect on the private market. Moreover HOS flat owners are encouraged to sell and cash in to buy private housing when times are good. This, in turn will boost sales and prices of private housing. So, would this be what the government intend to achieve?

 

 


 

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