Urban Renewal Authority to focus on bigger Hong Kong homes instead of studio flats in next project under relaxed mortgage caps

The Urban Renewal Authority has said it will build fewer studio flats in its next project, focusing instead on homes that are bigger in size for first-time buyers as such properties will be affordable under relaxed mortgage caps.

Tasked by the government to deliver more “starter homes” for aspiring property owners in Hong Kong, the URA said it learned from criticisms over its pilot project to better cater to families’ needs.

The larger two- or three-bedroom flats in the To Kwa Wan development would be more expensive because of their size, but should still be affordable for buyers in light of the relaxation of caps on mortgage loans announced by the government, the authority said.

A plot along Chun Tin Street will be redeveloped. Photo: Felix Wong
A plot along Chun Tin Street will be redeveloped. Photo: Felix Wong

“We believe [buyers] can still afford the down payment andmonthly contribution under the applicant assets and capital limits in the scheme,” said URA managing director Wai Chi-Sing during a press briefing on Friday.

The site, located on Chun Tin Street, is behind the first starter home “eResidence” scheme launched last year. The land has already gone through resumption procedures, and can yield 300 flats.

In her policy address two weeks ago, Chief Executive Carrie Lam Cheng Yuet-ngor tasked the authority with a “new mission” to provide more starter homes or other types of subsidised housing.

During her speech, Lam also said the mortgage cap would be raised to 90 per cent from 60 per cent, for homes worth as much as HK$8 million, enabling first-time buyers to secure more loans for their purchases.

First-time buyers can aim for pricier flats but critics slam relaxed mortgage cap

The starter-home scheme, first announced in 2017, is aimed at providing affordable housing for those too well off to live in public flats but who are priced out of the city’s red-hot private property market.

Flats in the “eResidence” project, ranging in size from 261 to 507 sq feet – with the biggest being two-room units – were sold from HK$3.15 million to HK$6.6 million after a 38 per cent discount. Critics also said the URA’s tiny studio flats were not suitable for families.

However, the new project with bigger flats may not satisfy urgent buyers, as it will take three to four years to complete.

“It was the most readily available site on hand. We still have to consult our board before things can be confirmed. Then we can start drawing plans,” Wai said.

The URA managing director added that the authority was working out the maths on how many starter-home projects it could deliver in the future, as such flats, to be sold at discounts, would be a financial burden for the agency.

Only permanent residents without a property in Hong Kong can purchase the flats, as long as they meet income and asset limits.

First Hong Kong starter homes project draws huge number of applicants

URA management was unable to give concrete details on its willingness to commit to the “new mission” of building other types of subsidised housing – such as under the Home Ownership Scheme – for lower income groups however.

“We have a separation of roles, and the building of these flats would be left in the hands of the Housing Authority,” URA chairman Chow Chung-kong said. “Our most important job is still urban renewal.”

The major business of URA, a financially self-sustaining body, has been to acquire old private properties in rundown neighbourhoods and redevelop them into private residential properties for sale at market prices.

But the URA also agreed to grant a part of the resumed lands for free to the Housing Authority to build 800 subsidised flats in two coming projects to redevelop civil servants’ estates in Kowloon City.

“The URA will spend our own money on acquisition offers and assist in the planning process. And we will sell the rest of the plots, yielding about 1,200 flats to break even,” Wai said.

This article Urban Renewal Authority to focus on bigger Hong Kong homes instead of studio flats in next project under relaxed mortgage caps first appeared on South China Morning Post

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