The Government announced today (November 13) a set of clear and comprehensive housing policies and a package of measures to facilitate the efficient operation of the property market and restore public confidence in it.
Addressing the Legislative Council today, the Secretary for Housing, Planning and Lands, Mr Michael Suen, said extraordinary measures are required to restore confidence and help the economy tide over the current crisis, one characterized by continuing deflation, lackluster domestic consumption, external uncertainties as well as over supply in the property market.
In his "Statement on Housing Policy", Mr Suen maintained that the overarching objective of the Government's housing strategy is the provision of subsidized rental housing for families in need. He also acknowledged that Government intervention in the property market must be kept at a minimum by withdrawing as far as possible from other housing assistance programmes, a conclusion drawn after a comprehensive review and consultation conducted during the past few months.
Flowing from this, Mr Suen believes that the Government should focus its role on ensuring an adequate supply of land to meet market demand and the provision of rental assistance.
In future, the scale of the public housing programme will be determined by actual demand with a view to maintaining the average waiting time for public rental housing (PRH) at three years, he said, noting that the number of families on the PRH waiting list has been substantially reduced to 90,000, compared with 150,000 in 1997.
The Government will continue to assist low-income families and PRH tenants to become home owners, but the direct provision of subsidized sale flats should give way to loans for purchase of flats of their own choosing.
"Compared with the 'brick and mortar' approach, housing loans are more flexible. The Housing Authority can adjust the annual loan quota according to the actual demand."
However, recognizing that home ownership is essentially a matter of personal choice and affordability, one that should best be driven by market forces, Mr Suen dismissed the need to set any rigid indicator.
"It is therefore unnecessary for Government to continue to hang on to the long term target of achieving the 70% home ownership rate by end 2007," he stated.
Similarly, he considered it superfluous to pre-determine a numerical target for the provision of assisted housing opportunities as the number to be provided every year would have to be adjusted flexibly according to actual needs, and might vary upwards or downwards.
With the positioning and direction of the Government's housing policies clarified, Mr Suen announced a nine-point package of highly focused measures to redress the current imbalance between supply and demand in the property market.
He noted that in addition to around 20,000 flats which were completed in the past few years but remain unsold, there are another 30,000 uncompleted flats available for sale now, making it difficult for the market to digest.
"To rectify the current serious supply and demand imbalance, Government has decided to stop all scheduled land auctions and call off the two remaining land auctions in this financial year. In addition, the Application List will be suspended until end 2003. Thereafter, the supply of new land will only be triggered from the Application List," said Mr Suen.
On concerns about the impact the residential development projects of the two railway corporations has on the market, Mr Suen said better co-ordination would be done on the pace and timing of tendering of these developments.
He also revealed that an understanding had been reached with the corporations concerned whereby no railway property developments would be put up for tender in the coming year.
Mr Suen went on to say that the Government would recommend to the Housing Authority that, except for a small number of unsold and returned flats, the production and sale of Home Ownership Scheme (HOS) flats would cease indefinitely from 2003 onwards. Completed flats and those under construction would be disposed of through market-friendly means.
"The advantages and value of the HOS are gradually diminishing, so are its role and attractiveness," he remarked, pointing to the worsening overlap between the HOS and the private residential market as well as the recent record low subscription rate.
In addition, the Government will stop all mixed development projects, including the Flat for Sale Scheme operated by the Housing Society and will recommend to the Housing Authority to terminate the Private Sector Participation Scheme.
Noting that around 134,000 public rental units have been put up for sale under the Tenants Purchase Scheme (TPS) over the past five years, Mr Suen said proposals would be put to the Housing Authority to halt the TPS after the sale of phases 6A and 6B next year.
The decision was made in line with the Government's reduced involvement in the property market and the need to maintain an adequate supply of PRH units for allocation to eligible families in the long run, he explained.
As far as the private sector is concerned, Mr Suen said a thorough review of the Landlord and Tenant (Consolidation) Ordinance would be conducted with a view to resuming the free operation of the private rental market.
"Apart from revitalizing the market to make it more alluring to investors, the proposed relaxation of tenancy control will give us an additional leverage to promote the implementation of the rental allowance scheme by making available more choices of private rental flats," he suggested.
Finally, the remaining anti-speculation measures in respect of restriction of internal sale quota and the number of residential unit and car parking spaces for sale to individual buyers would be removed.
Mr Suen believes that a clear, comprehensive and coherent housing policy is the first step to restoring public confidence in the property market. Only with this can the market operate smoothly and thrive, he maintained.
End/Wednesday, November 13, 2002