Secretary for Transport & Housing Eva Cheng says the My Home Purchase Plan proposed in today's Policy Address will not stimulate the property market as it will not reduce the supply of private residential land or land for public rental housing.
The plan will see the Government provide land for the Housing Society to build "no-frills" small and medium flats for lease at prevailing market rent. It is open to people with a household income under $39,000 or a personal income under $23,000.
The tenancy period will be up to five years, within which the rent will not be adjusted. Tenants can buy the flat or another flat up to two years after the completion of the five-year lease. They will receive a subsidy equivalent to half of the net rent they have paid during the tenancy period, and use it for part of the down payment.
The Government has earmarked sites in Tsing Yi, Diamond Hill, Sha Tin, Tai Po, Tuen Mun and other areas to build 5,000 flats under the Plan. The first project will provide 1,000 flats in Tsing Yi by 2014.
Purchase channel
Elaborating on the proposal at a press conference today, Ms Cheng said while it offers a channel for people to buy homes, it is not a measure to suppress property prices. The plan will not reduce the supply of private residential land or land for public rental housing, as the land will not come from either the Application List or the sites earmarked for public rental housing.
She also said it provides the sandwich class with flexibility in their home purchase plan, including the choice of opting to purchase the flat they rent, another flat under the plan, or a flat in the private market.
It provides the sandwich class with rental flats for a maximum of five years so they will have sufficient time to think through their housing plan while building their capability to buy a flat.
It also means they will not have to rush into buying flats that are over-priced during short-term fluctuations in property prices. There also will not be any rental adjustment during the five-year period, which will help them save for part of the down payment for their future flat purchase.
There will be no re-sale restrictions or premium payment requirement as is the case of conventional Home Ownership Scheme flats. This will facilitate upward mobility in the property market.
Ms Cheng said a steering committee will be formed in the coming year to regulate the sale of first-hand private residential flats.
