ENG-1998 — Page 255

HOUSING

not be repaid. Up to December 1998, 22 443 loans and 1 387 subsidies were granted and 13 913 public rental flats were recovered.

Sandwich Class Housing Scheme

The Sandwich Class Housing Scheme, comprising a Main Scheme and a Loan Scheme and administered by the HKHS, was introduced in 1993 to help middle income families buy their own homes. In 1998, the lower and upper income limits for the Scheme were revised to $33,001 and $60,000 respectively.

The Main Scheme involves the construction of flats which are sold to eligible applicants at discounted prices subject to a five-year resale restriction. The land is granted to HKHS on concessionary terms but all other development costs are borne by the HKHS. The quality of the flats is comparable to that of private developments. 3 318 flats at Tsing Yi, Ma On Shan, Ap Lei Chau and Kwai Chung have been completed, and another 8 748 flats are under construction.

The Loan Scheme enables families to buy their own homes in the private sector. Successful applicants can borrow up to $550,000 or 25 per cent of the flat price, whichever is lower, to buy a domestic property no more than 20 years old and below a price of $3.3 million. The loan is repaid in 120 equal instalments starting from the fourth year after the loan is made. Interest is charged at two per cent a year. By the end of December 1998, 5 700 loans worth $2,700 million had been granted.

As property prices dropped substantially in 1998, many flats in the private sector are now within the reach of the sandwich class. The government has therefore decided to suspend the Main Scheme (except for a few projects under construction).

Home Starter Loan Scheme

The Home Starter Loan Scheme was launched in April 1998. It is designed to help families to buy their own homes for the first time. Eligible applicants receive low- interest loans of up to $600,000 or 30 per cent of the property value, whichever is lower. The HKHS administers the scheme. In July 1998, the initial quota of 6 000 for 1998-99 was expanded to 12 000. In each of the following three years, at least 6 000 loans will be available. Up to end 1998, 9036 certificates of eligibility had been granted to successful applicants.

Tenant Purchase Scheme

The Tenant Purchase Scheme, launched in January 1998, will provide the opportunity for at least 250 000 families living in public rental housing to buy their rental flats at reasonable and affordable prices in the next 10 years. A total of 27 000 flats in six estates from six to 13 years old have already been offered for sale at very low prices. By December 1998, 23 110 families (86 per cent) had indicated an interest in buying, and 19 723 (73 per cent) had made formal purchase offers by paying 'intention money' of $2,500.

Three more phases of this scheme, one each for the years 1999 to 2001, were announced in March 1998. Each phase consists of six estates, or about 27 000 flats. A further phase will be announced in early 1999 to maintain a rolling programme.

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