Government unveils new initiatives to ease housing crunch

Homes under the HOS will now be based on a median monthly income of $39,500.

The government has unveiled a slew of initiatives to ease Hong Kong’s worsening housing crisis and boost home supply.

In addition to the hotly anticipated tax on vacant properties, Chief Executive Carrie Lam announced a move revising the affordability test of the pricing mechanism for the Home Ownership Scheme (HOS).

Instead of using the current monthly income limit of White Form family applicants at $57,000, the median monthly income of households which do not own flats at $39,500 will be used instead, ensuring that around around three quarters of flats are more affordable.

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CE Lam said in a statement that the move will bring the price of HOS flats down to about 52% of market value from the current 70%. For instance, a 400 sqft flat in Kai Tak Kai Long Court which would have gone for $3.9m or $9,800 psf in the previous scheme will now cost only $2.9m or $7,280 psf under the revised unit pricing scheme. 

The Green Form Subsidised Home Ownership Scheme flats will also be discounted 10% more than the previous HOS sale exercise. It will kick into effect this year.

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Additionally, the government will form a task force to enable more NGOs to pursue transitional housing projects. The Consent Scheme will also be amended to require developers to offer for sale no less than 20% of the total number of residential units subject to the pre-sale consent at each turn of sale.

"The new initiatives on housing announced today address some of the people's concerns, but we need to expand our developable land in order to significantly boost housing supply," she added. 

Photo from Baycrest - Own work, CC BY-SA 2.5