New 'affordable' housing still unaffordable for the average Hong Kong resident

New 'affordable' housing still unaffordable for the average Hong Kong resident

HONG KONG - Hong Kong residents hoping to be able to buy homes under a pilot programme that aimed to create affordable housing are finding that they still cannot afford condos being sold at the first complex developed under the programme.

Units at the new One Kai Tak condominium complex are going for from 5.8 million Hong Kong dollars (S$1.07 million) to HK$14.6 million (S$2.68 million), according to the Nikkei Asian Review - noting that a real estate agent says that makes some of them even pricier than similar condos in the area.

The programme under which the One Kai Tak was built is know n as "Hong Kong Property for Hong Kong People" (HKPHKP). It was launched by the Special Administrative Region of China's Chief Executive Leung Chun-ying when he took office in 2012.

With more than 7.3 million people living in its 1,100 square kilometres, Hong Kong property prices have consistently ranked as the world's most unaffordable, according to the US-based consultancy Demographia.

The HKPHKP scheme was supposed to keep prices within reach of middle class Hong Kong residents by allowing the developer to sell them to permanent residents, who are not permitted to resell them to anyone who is not a resident for 30 years.

"The Government executed the policy only once when two residential sites in Kai Tak were offered for sale by tender in March last year," the Hong Kong government said in a news release 2014, noting that it sold two residential sites under the pilot scheme.

Built on land that was once occupied by the old Kai Tak Airport in northeastern Kowloon, One Kai Tak was developed by the China Overseas Land & Investment company and is the first one completed under the programme.

Despite the restrictions, however, the Nikkei Asian Review said the company's affiliate, China Overseas Property was inundated with more than 4,200 offers for the first 110 units when they went on sale earlier this year.

So China Overseas Property subsequently raised prices by 2 per cent for the next batch, and its managing director Tony Yau Wai-kwong bluntly told the Review that there was no restrictions on pricing - only on who the company could sell units too.

"This isn't affordable for us," the Review reported one thirty-something couple who visited the showroom as saying. "This property is for wealthy investors."

But another potential buyer whose name was given only as Ms Suen told The Standard newspaper that she thought having a Hong Kong permanent identity card meant there would be a discount. Yet while the prices were still higher than expectedm she said she would still consider buying a condo at One Kai Tak if she liked the layout and facilities, because she was concerned the prices would go even higher by the time the development was completed in 2017.

This article was first published on December 5, 2016.
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