TNAG-0912-FCO40-1122-Policy-on-housing-and-resettlement-in-Hong-Kong-1979 — Page 141

C.S. 166

CONFIDENTIAL #2

(i)

(ii)

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XCC(77)8

self-contained flats each containing two bedrooms, a combined living and dining room, a kitchen, a bathroom and a balcony where ventilation is required;

a total of 7, 204 flats, with a range of sizes from 375 square feet to 600 square feet of lettable floor area;

(iii) costs ranging between $85, 500 per flat and

$142,000 per flat.

Leaving aside any concessions as to price and assistance with mortgage finance the Working Party considers that these flats should be attractive to buyers. The Working Party is also satisfied, given the criteria of eligibility for assistance and the mortgage arrangements outlined in this memorandum, that the proposed price range is within the means of the target income group; and finally

(e) to finance these flats, the Financial Secretary proposes

to put the Home Ownership Fund in funds initially via the 1977-78 draft Estimates.

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As regards paragraph 4(b) (demand and assistance towards pur- chase): the Working Party has studied the results of a sample survey of households in the lower-middle income bracket. Although this was a pre- market survey, and a limited one at that, it indicated an interest in the prospect of home ownership among households earning between $1,500 and $3,500 a month, particularly in respect of private sector tenants. Generally the survey indicated that there is a strong desire to live, as far as possible, in settled conditions. The survey also confirmed the Working Party's belief that these households are unable to meet the existing terms available on the open market for mortgage facilities (which usually offers 10 to 12 year loans at interest rates varying between 10% and 10 3/4% a year, on 70% to 80% of the assessed value or sale price of the flat).

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The Working Party considers that, for two reasons, these households should be assisted towards becoming home owners. First, against the background of a manufacturing, export-oriented economy, Hong Kong's financial and social policies have developed in such a way that public services and benefits have tended to be provided largely on the basis of meanstested need. This is manifested in rules of eligibility (for example, eligibility for rented public housing is determined having regard to household income and the size of the household, while persons applying for legal aid or public assistance are also subject to means - tests); it is also manifested in rules of remission, where fees and

CONFIDENTIAL

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