HOUSING
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to be set up with an initial cash balance of $7 billion will boost the production of public housing by up to 10 000 flats over the next five years.
The Sandwich Class Housing Scheme, administered by the Hong Kong Housing Society, was also progressing well. All three phases of the interim loan scheme, aimed at offering loans of up to $2 billion to the so-called 'sandwich class', were launched before the end of 1994. Housing developments under the main scheme will benefit families from the end of 1995.
A more detailed report is given at the end of this chapter.
The Housing Strategy
In
pursuance of a free market economy, the government's philosophy on housing develop- ment is to provide sufficient land, supporting infrastructure and a financial environment which induces private sector investment in property development.
Through the Housing Authority and the Housing Society, the government provides assisted housing for people who cannot afford private housing or who are affected by clearances and redevelopment of old housing blocks.
Public housing estates are developed as total living environments and include a wide range of community, commercial and transport facilities. There is also a continuing pro- gramme to redevelop the older estates, to bring them up to date in design and standards.
It is also government policy to promote home ownership in Hong Kong. The declared objective is to achieve an overall home ownership rate of just under 60 per cent by 1997.
The Long Term Housing Strategy was first promulgated in 1987, although the provision of assisted housing has a much longer history. The declared policy objectives are, among other things, to provide adequate housing at an affordable price or rent to all households, and to achieve efficient and equitable use of resources by ensuring that housing subsidy is provided in relation to financial needs.
As the principal organisation responsible for carrying out the public housing programme, the Housing Authority has planned the production of some 292 500 new flats in the years up to 2001. Of these, 162 000 will be rental flats and 130 500 public flats for sale.
During the same period, the Housing Society, a non-profit-making agency, will produce 25 433 flats -3 248 for rent and 22 185 for sale.
Private Sector Housing
Private housing production averages about 30 000 flats each year. In 1994, 34 170 flats were built by the private sector.
Since mid-1993, there had been growing public concern about rapid increases in property prices and pressure for government action to check the price spiral.
Property prices had increased sharply under the combined effect of a lower-than-average level of supply in 1992 and 1993; and an exceptionally strong demand due to population growth, changing social patterns, increasing affluence, negative real interest rates and the inflow of foreign capital into the property market.
It was estimated that prices for private domestic properties had risen by an average of 145 per cent between the end of 1989 and 1993. Prices in respect of the more popular estate-type developments had increased by more than 200 per cent. Prices in popular developments soared by another 30 per cent in the first quarter of 1994.