SCMP Monday, August 27, 2001

Sales of subsidised flats plummet to lowest levels


Sales at five of the most popular subsidised housing projects have plunged to their lowest levels since the property market drop - increasing pressure on the Government to scrap the Home Ownership Scheme.
Property agents said increased competition from superior private flats was to blame, with one agent predicting the scheme's extinction.
Transactions were down between 48 per cent and 85 per cent according to figures for 1997 and 2000 released by Midland Realty.
The five subsidised estates are Quarry Bay's Kornhill Garden, Richland Gardens in Kowloon Bay, Diamond Hill's Long Poon Court, Tuen Mun's Siu Hong Court and Sui Wo Court in Sha Tin.
At Siu Hong Court just 103 flats changed hands last year, compared to 669 in 1997. This is despite the average price per square foot having gone from $2,896 to $1,312.
At Richland Gardens, where the price has fallen to $2,383 per square foot from $5,162, only 264 flats changed hands last year compared to 701 flats in 1997.
The latest figures followed tycoon Li Ka-shing's call on Thursday for the Government to first reduce and then scrap construction of Home Ownership Scheme (HOS) flats because of falling demand.
Midland Realty executive director Victor Cheung Kam-sing said: "HOS flats are becoming extinct. The trend is becoming clear."
He said HOS flats could not compete in the second-hand market with private flats which now offered comparable prices but with better facilities and superior construction.
Ricacorp Properties managing director Barry Law Lam-wai said with low interests and prices, even some low-income families could afford private flats.
However, a senior Housing Authority official denied HOS flats depreciated more quickly than private ones, saying there was still a sustainable demand for them.
"[Poor sales] are due to the sluggish economy. I don't believe HOS flats suffer a bigger impact than private flats in their own districts," he said.
The so-called Breakfast Group of independent legislators is putting pressure on the authority to sell some or all of its 38 sites - worth an estimated $46.8 billion - earmarked for the construction of HOS flats in the next four years.
The authority is expected to increase the number of loans issued under the Home Purchase Loan Scheme from 4,500 to 5,000 a year from 2003-05 and 6,000 in 2005-07 to help people buy private homes. During the same period, the supply of HOS flats will be slashed by at least 21,000.