Home Ownership Scheme/Private Sector Participation Scheme

The HOS and the PSPS were introduced by the HKHA in 1978 and 1979 respectively to assist eligible households and public housing tenants to purchase homes at discounted prices. Since then, over 300 000 HOS and PSPS flats have been sold, representing over 13 per cent of the total housing stock in Hong Kong. In response to changes in the market conditions, the HKHA has over the past few years made substantial adjustments to its HOS/PSPS programmes. These included a major cutback in its HOS/PSPS production programme, transferring HOS/PSPS units to rental use and implementing a moratorium on HOS sales in July 2000 and September 2001, respectively.

    Given the significant changes undergone in the economy and the property market over the past few years, the Government believes that home ownership should essentially be a matter of personal choice and affordability. In this respect, the Government has come to the view that it should withdraw from its previous role as a direct housing provider and refrain from competing with the private residential market. Furthermore, it should facilitate eligible families to become home owners through the more flexible and well tested means of loans. Accordingly, it has been decided that, with the exception of a limited number of unsold and returned HOS/PSPS flats, the production and sale of HOS/PSPS flats will cease indefinitely from 2003 onwards.

Mixed Development Scheme

Mixed development is a means to encourage private sector involvement in the public housing programme. Under this approach, residential sites are offered for sale by tender, and the successful tenderer is required to hand over a specified proportion of flats within the development to the Government for sale to eligible low income families at designated prices, and retains the remaining proportion of flats for sale in the open market. The Government has decided to stop all the mixed development projects being planned by the HKHS and the HKHA, in line with its overall objective of minimising government intervention in the market.

Tenants Purchase Scheme

In 1998, the HKHA launched the Tenants Purchase Scheme (TPS) to offer sitting PRH tenants an opportunity to purchase their flats at substantially discounted prices. Over the past five years, some 134 000 PRH units have been rolled out under the scheme. The Government has decided to halt the TPS following the disposal of those units already announced for sale so as to give effect to its objective of withdrawing from direct provision of subsidised sale flats. Sitting tenants can continue to apply for loans to purchase flats in the private market, or to purchase flats in the secondary HOS market for which no payment of premium is required.

Home Assistance Loan Scheme (HALS)

Following the withdrawal from the direct provision of subsidised sale flats, loans have become the principal means for offering assistance to eligible families aspiring to become home owners. The HKHA approved in December the introduction of a new Home Assistance Loan Scheme to replace its HPLS and the Home Starter Loan Scheme (HSLS) operated by the HKHS. Key features of the new scheme include raising the income limit for White Form (WF)⁶ family applicants above that under the HOS from $20,000 to $23,000 a month ($11,500 for a singleton). The loan amount for WF applicants will also be raised to bring it on a par with that for Green Form applicants⁶ ($530,000 for a repayment period of 13 years). The scheme will be kept under review.