New batch of Hong Kong subsidised flats still good deal even with lower discount, advisers say – Technologist

“We will not compare prices in the private market as we have different target buyers. We want to help buyers who cannot afford private homes,” Wong said.

“Even when the property market slumps, there are some people who cannot afford the prices.”

She said the authority had many measures to help successful applicants, such as providing a mortgage default guarantee period.

Wong also said subsidised housing projects would remain popular given the overwhelming response in the past years.

Last year, applications opened for more than 9,100 new subsidised homes, offered with a 38 per cent discount to the market price, with 19 applicants competing for one flat.

The pricing mechanism for subsidised housing was revised in 2018 to calculate discount rates based on a family’s budget and affordability, rather than being linked to market prices.

Between 2018 and 2023, subsidised homes were offered at 38 to 49 per cent discounts on market prices.

Wong said the discount was relatively lower this year due to the drop in property prices, while target buyers had made more money and required less help.

According to government figures, the home price index in June dropped to the lowest level since October 2016.

Wong also made it clear the authority would not amend selling prices of the current batch of subsidised flats to avoid unfairness, even if the private homes market fell further.

Ranging from 186 to 510 sq ft, the 7,132 new subsidised homes offered this year will be sold for between HK$1.43 million (US$183,400) and HK$4.67 million.

The sites are located at Kowloon’s Kwun Tong, Kai Tak and Yau Tong, as well as Tuen Mun in the New Territories and Tung Chung on Lantau Island.

Applications for the scheme will open later this year and eligible applicants will go through the ballots.

Lawmaker Scott Leung Man-kwong, who also sits on the authority’s subsidised housing committee, said the flats would still be a good deal to low- to middle-income homebuyers.

“Compared with private flats, the discount is still relatively high as people cannot find a private flat with two rooms offered at around HK$4 million in urban areas,” he said.

The scheme provides homebuying opportunities for public rental housing tenants, while “white form” applicants – prospective buyers living in private flats and not receiving housing subsidies – can apply if their income and assets fall under a set limit.

Families of two or more in the white form category will be subject to an income ceiling of HK$60,000 and an asset limit of HK$1.23 million, while the threshold amount will be halved for single-person households, an insider said.

Authorities will reserve 40 per cent of the flats for households with elderly members or newborns. They will also be given priority when it comes to selecting homes.

Ten per cent of the total flats will be reserved for single-person households but they will be the last group to select homes.

The authority also improved home selection arrangements by setting quotas for different categories of applicants to ensure those with priority to pick – such as families with elderly members – would not snap up the flats of popular estates in prime locations.

Vincent Cheng Wing-shun, deputy chairman of the Legislative Council’s housing panel, noted that there were far fewer flats in the coming batch than in the previous one and expressed concern the trend would continue.

“I worry that a lack of subsidised housing supply will affect the turnover in public rental flats and can hardly fulfil the demands from other eligible homebuyers,” he said.

Fellow legislator Wendy Hong Wen said the government should offer more subsidised flats for sale and improve their quality, such as building bigger homes, so lower-income groups had a homebuying option instead of waiting for a public rental flat.

As of June, the average waiting time for a public rental home was 5½ years.