Following the Policy Address delivered by the Chief Executive on 13 October, and the dialogue between Secretary for Transport and Housing Ms Eva Cheng and young people on 23 October, the proposed “My home purchase scheme becomes the most widely discussed issue in the community ”. In this issue, Prof. Eddie Hui of Department of Building and Real Estate shares his views on the scheme with our readers.

1/ Hong Kong people mostly find it difficult to buy their own flats. Do you think the scheme can help them tackle the problem?

The scheme can help them to a certain extent. First, it helps those tenants save money, otherwise they will find it even more difficult to save an enough amount of money if there is no such scheme. Second, the scheme can help push organizations to provide more flats, and that at least 1,000 more flats will be available for supply in the market every year. Of course, I understand that there are imperfections for the scheme, such as the amount of money saved may not be enough to settle the down payment. Ms Eva Cheng, however, has already pointed out that the scheme is mainly to help those home buyers who have saved money for six to 10 years and with a steady income, but still lack of enough money for down payment. The government therefore allocates some public resources to help them.

In addition, those tenants of the scheme will have seven years’ time to consider whether to buy a flat. Usually, there will be adjustments in the property market cycle, and so those tenants can buy a flat at the time when they think fit. People often compare “My home purchase scheme” with “Home ownership scheme”. Both schemes in fact face the same problem- time is needed for their implementation.

2/ The government has confirmed that it will not resume the “Home ownership scheme”. What do you think the government can do to optimize “My home purchase scheme”, so that it can help the public more effectively?

First, people are worried that the supply of 1,000 flats is not enough. On this, the government may increase the number of flats according to time, economic situations and number of applications. In addition, the scheme may attract some small and medium sized developers to build flats that are practical and not luxurious and hence increase the supply of such flats. Also, people are worried that the money saved may not be enough for down payment. In response to this, the government may offer discount when fixing the property price and may consider arranging financial schemes so that people can have a mortgage of more than 70 percent of the flat’s value, thereby reducing the amount of money required for down payment.

3 / To avoid the problem of “inflated building” getting more serious, the government has decided to tighten the policy. What do you think about the measures proposed by the government?

I think these are what the government should do, so that people can know the genuine size when buying flats, and it will also enhance the sustainable development of society.

4/ The government has suspended the scheme about immigration through purchasing property. Will this have any impact on the property market and will it help cool down the property market?

Among the property transactions in Hong Kong each year, those generated by capital investment entrants only account for one percent while those generated by mainland visitors reach double digits. Therefore, there will be little impact on the property market even when the scheme is suspended.