HONG
KONG - Space-starved Hong Kongers could see a steep ramp-up in the
number of new flats built - to the tune of 50,000 a year, if a key aide
to new leader Leung Chun Ying has his way.
If
realised, it will be the highest number seen in Hong Kong over the past
two decades, and will certainly bring to a screeching halt the spike in
property prices, which have soared 80 per cent in the last three years
alone.
It
marks a huge jump from the 18,000 flats that were built in the last
fiscal year ending March, and outstrips the 35,000 goal set by the
previous Donald Tsang government for the coming years.
In
an interview with The Straits Times, Mr Barry Cheung, who chaired Mr
Leung's election campaign and is now a member of his executive council,
said: 'I think we have to provide significantly more flats than what we
did in the last five years.
'We need to get it up to at least 50,000 a year.'
Mr
Leung has made housing a key platform of his government and has pledged
to release more land. But he has not said how many homes they will
provide for.
Mr
Cheung's view - he is also the chairman of Hong Kong's Urban Renewal
Authority - provides a hint of the parameters that the new
administration is considering.
But flooding the market with 50,000 units a year invokes fears of plummeting property prices.
In
1997, Hong Kong's first chief executive Tung Chee Hwa promised to build
85,000 flats annually - reportedly Mr Leung's idea. But the policy
collapsed when market sentiment went south and Hong Kong was hit by the
Asian financial crisis.
Mr
Cheung says that what is needed this time is for the government to step
in with more public housing to buffer private home owners from the
impact.
Private
homes comprise over half - 52 per cent - of the market in Hong Kong.
About 30 per cent live in public rental flats, while the remaining 18
per cent live in flats the government sells at discounted prices.
Of his proposed pipeline of new homes, less than half - about 20,000 - would be private homes. The rest would be public housing.
At
the bottom, more rental flats would be built - some 176,000 applicants
are now on the waiting list. The government will build 15,000 such flats
a year.
The
second tier is the subsidised homes under the Home Ownership Scheme
(HOS) for low-income families earning below HK$30,000 (S$5,000) a month.
There is a planning target of 5,000 a year.
Mr
Cheung says that a third tier needs to be created, for what he calls
'the typical middle class' - those who earn too much to qualify for HOS
but cannot afford private homes. This way, needs can be met 'without
necessarily bringing down the private market'.
It
will take three or four years to realise this plan of building more
flats, but genuine buyers will be able to enter the market before then,
he adds.
'If
investors see that down the road, there will be increased supply, they
will be less inclined to speculate and that takes demand out of the
market today. So more end-users would be able to go in,' he notes.
Such
a proposal would benefit the many Hong Kongers - about 100,000 live in
homes such as garrets and bed-space flats - on the hunt for affordable
homes.
But
it raises the ire of developers like Mr Steward Leung, chairman of the
Real Estate Developers Association executive committee, who calls it
'irresponsible'.
'If
all 30,000 are for public rental housing, we developers of course
welcome that. But if they are for HOS flats, then the market will be
shaken, definitely.'
Dr
Edward Yiu of the Hong Kong University worries about a possible
unintended impact of having the public sector expanding its role - a
'polarised housing market'. He says: 'Developers would want to maximise
their profits with the less land given, and so will turn them all into
luxury flats.'
