【明報專訊】MUCH of Chief Executive Donald Tsang's last policy address is devoted to land and housing policies. Only when he is about to depart has he seriously looked at the issue. He has proposed to introduce a new Home Ownership Scheme (HOS) and enhance the My Home Purchase Plan (MHPP).
His last policy address says, "The new HOS will serve as a buffer when the private residential property market is in disequilibrium due to unbalanced demand and supply, as well as internal and external macroeconomic factors such as low interest rates and quantitative easing measures taken by other economies." It follows that the new HOS will be ephemeral. The availability of new HOS flats will depend on the business cycle, or rather, on property prices. The specifics of the new HOS have yet to be devised by the Housing Authority. However, it is quite clear that there will be a basic criterion. The government will stop selling or building new HOS flats if the monthly mortgage repayment of an eligible family (whose monthly household income does not exceed $30,000) does not exceed 40% of its monthly household income.
Under the new HOS, flats with a saleable floor area between 400 square feet and 500 square feet will be offered at between $1.5 million and $2 million each, or on average at about $4,000 a square foot. New Territories residential properties between 400 square feet and 700 square feet now go for about $5,300 a square foot. If their prices drop 25%, the government will stop selling new HOS flats. The availability of new HOS flats will depend on property prices. Clearly, the new scheme is essentially different from the old one. It is apparently aimed at pacifying sandwich-class citizens (who each make between $20,000 and $30,000 a month) rather than meeting housing demand or increasing social stability.
The way of determining the premium a new HOS flat owner will have to pay when he sells his unit may cause the next administration difficulty. Donald Tsang said, "The Housing Authority may take the subsidised portion of a unit's purchase price as a loan to the owner, the amount of which will not be adjusted even if the market value of the unit increases." In other words, the owner will pocket any value increase. New HOS flat owners will of course be happy to take such a generous offer. However, old HOS flat owners (who number 300,000) will have no such benefit. The government will favour one group and discriminate against the other. This will be a big problem the next administration must solve. Its mishandling may cause a serious social contradiction.
The Tsang administration was against reviving the HOS. It argued, inter alia, that the government should not help citizens to invest. However, new HOS flat owners may pocket value increases. Furthermore, to make the MHPP more appealing to citizens, the government has proposed the initial market selling price will serve as the "ceiling price". A participant may buy the flat he rents at the "ceiling price" within a specified period regardless of any rise in property prices.
It is hard to see why Donald Tsang has come up with an HOS that is so vastly different from the one the generality of citizens want the government to revive. Nevertheless, the new HOS and the enhanced MHPP have one thing in common. Both will provide considerable incentive for owners to sell their subsidised flats to get cash to enter the private housing market.
Whether the new HOS and the enhanced MHPP will be good or bad for Hong Kong is worth thorough discussion. The old HOS (which was introduced thirty years ago) has proved effective and has done Hong Kong a lot of good. It is baffling that Donald Tsang has decided to introduce the dubious new HOS rather than revive the old HOS.