Amid economic downturn in Hong Kong, a lukewarm response to latest batch of subsidised homes

Lilian Cheng

Hong Kong homebuyers gave a lukewarm reception to the latest batch of subsidised houses to hit the market, with most of the estates involved shifting fewer than 10 per cent of flats since they were made available this month, official statistics show.

The 4,871 flats across six estates, released by the Housing Authority in December, formed the biggest tranche of homes put on the market since the body restarted its Home Ownership Scheme (HOS) in 2011.

Flats under the scheme, which are newly built by the authority, are available to buy at heavy discounts for people who meet certain criteria. That includes families with a monthly income of less than HK$58,000 (US$7,400) and assets of less than HK$2.01 million, or single people earning half that monthly amount.

Flats in the new batch range in size from 276 sq ft to 568 sq ft, and are priced at 41 per cent below the market rate, at between HK$1.56 million (US$200,000) and HK$5.29 million. Most residents would be able to move in next year.

Of the estates, Yuk Wo Court in Fo Tan had the lowest uptake, with only seven out of 830 units sold in their first 10 working days on sale. A project in Tsuen Wan only sold 2 per cent of flats, with others in Tseung Kwan O and Ma On Shan selling 7 per cent.

The other two estates were in Ho Man Tin and Cheung Sha Wan.

Stanley Wong Yuen-fai, chairman of the authority’s subsidised housing committee, said the recent economic downturn in the city might have affected sales, adding that he believed all flats would eventually sell.

Authority statistics compiled by the Post show most of the first-batch buyers picked Ho Man Tin, with 415 out of 605 flats, or 69 per cent, sold in 10 days. The area is relatively desirable, given its school network and proximity to core urban areas.

But in overall terms, only 14 per cent of the 4,871 flats sold from December 9 to 20, a relatively cold response from buyers compared with the previous batch of flats, released in February, 24 per cent of which sold in the first 10 days, according to Post calculations.

Since the December batch was made available, the authority has invited 80 to 110 applicants every day – chosen by lucky draw – to select their preferred unit.

So far, 900 qualified buyers have been invited, but only 712 showed up and bought a flat, meaning a 21 per cent no-show rate.

Some potential buyers who set up a chat group to share sales information said they were aware of the cold response among buyers.

“In the first round, there should be only 750 flats for family applicants living with elderly, but now we have heard the authority has invited those holding an allocation number of 1,500 or higher,” said Ric Lam, a hair stylist who plans to buy a flat with his wife.

“I guess many people would prefer to choose Ho Man Tin, but if in the end it’s too costly, then people might give up and pick other locations instead,” the 36-year-old said. “Some people are worried about an economic downturn.”

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But he said he would accept any flat, just to own a home. “I would accept any of the locations,” he said. “I’ve failed to get into too many rounds already.”

Committee chairman Wong noted that, with more than 300,000 applications, the scheme was still oversubscribed.

“Some potential buyers might be hesitant and want to see how the market goes first,” he said. “And given we have the best site in decades at Ho Man Tin, it is understandable that the first batch would snap up the most favourable site first.”

Stanley Wong was confident all the flats would sell eventually. Photo: Jonathan Wong

He said he assumed sales at other sites would pick up once flats there sold out.

“Since we have more than 170,000 applications from singles, they will absorb all the remaining units in the end, if we have any left over.”

The Housing Authority did not offer overall no-show rates, but said it would continue to invite about 110 applicants each day to buy the new homes, and that 85 of them showed up on December 20.

This article Amid economic downturn in Hong Kong, a lukewarm response to latest batch of subsidised homes first appeared on South China Morning Post

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