Hong Kong intends to allocate land for private developers to construct subsidized housing, aiming to ease the city’s housing crisis. While the government seeks to enhance affordable housing availability, the policy discourages the sale of unmodified flats. However, due to the program’s limited scale, industry experts believe the increased supply will have minimal impact on the private market. Hong Kong has been grappling with soaring housing prices and a significant wealth gap, prompting initiatives to address the issue and improve living conditions for its residents.
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Hong Kong plans to designate three plots of land by the end of 2024 for private developers to construct subsidized housing, aiming to increase the availability of affordable residences in the city. In the past, Hong Kong had a similar program prior to 2002, but currently, subsidized housing is exclusively built by the government’s Housing Authority and a non-governmental organization named Hong Kong Housing Society.
The initial two locations, set to be offered through a tender process at a discounted reserve price of 35%, are anticipated to yield a total of 2,300 apartments. These units will be made available to eligible buyers at 65% of the prevailing market rate. Secretary for Housing Winnie Ho shared this information during a press briefing.
Private developers are also incentivized to utilize their own land for constructing apartments within the program, benefiting from a reduced fee for altering the land’s initial designated purpose.
Hong Kong has faced longstanding challenges with exorbitant housing costs, which have surged by 350% over the past twenty years. This surge has resulted in one of the most substantial wealth disparities globally, transforming housing into a societal concern that Beijing is eager for the city to address. According to the survey firm Demographia, the city has retained its position as the least affordable urban centre in the world for thirteen consecutive years.
Observers in the industry have suggested that the government might need to offer additional incentives to bolster the involvement of private developers. Additionally, the government will not engage in repurchasing any unsold apartments from developers.
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