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Scramble for subsidized homes after 12-year break in HK

Reporter: Cathy Yang 丨 CCTV.com

01-25-2015 10:42 BJT

Authorities in Hong Kong have tightened mortgage rules, saying they want to prevent speculation on half-price homes that the government is building.  As the debate rages on, even the city’s tycoons have started to weigh in.  

Twenty-six year-old Meko Cheng is one of nearly 95-thousand locals who rushed to apply for subsidized homes soon as the government brought the scheme back after a 12-year break. 

"I want to buy a home now because in this generation I’m in, it’s very difficult to own one. Now is my chance," Cheng says.

Demand was so high, the queue here at the Home Ownership Scheme sales centre in Lok Fu extended out into the streets.

Stacks of free brochures still are still on offer – even as the application period had ended.

Building models of those on offer are still on display.  This one -- Ching Chun Court -- is what Meko had applied for.

Successful applicants won’t know exactly what it’s like inside -- as construction will still be completed from 20-16 onwards.  These 400-or-so square foot flats are being sold for at least 240 thousand U-S dollars -- 50 percent cheaper than market rate. 

Luck will play a big part in the process.  Only two-point-two percent of total applications – or two-thousand-160 subsidized homes – will be served.  The one, over-arching criteria:  the buyer must live in it, rather than use it as an investment. 

"I know it’s difficult, like winning the lottery, but I can never have the chance, if I don’t try," Cheng says.

Soaring prices have kept home buying out of reach for many in Hong Kong, considered one of the world’s most expensive cities to live.

Many of those unable to afford private homes are turning instead to the government’s subsidized housing scheme. Professor Richard Wong served as a member in the Housing Authority,

The rental housing unit should be privatized.  They should be sold to the sitting tenants at a hugely discounted rate.

The housing shortage was a highlight in Chief Executive C-Y Leung's policy address.

One of Hong Kong’s tycoons has since come forward with his own solution.  Lee Shau-Kee, Henderson Land Chairman laid out bold plans to build cheap homes.

And it is in this estate in Shek Kip Mei northeast of Kowloon - at Tai Hang Sai where Mr Lee plans to build five-thousand flats.  The price?  A 130-thousand U-S dollars for 300 square feet of space. No downpayment required, payment terms set at either 10 or 20 years.  Mr Lee’s top priority: to help Hong Kong’s working youth.

But in what complicates the task of awarding deserving buyers - the monetary authority have tightened mortgage rules.  Concern is growing affordable homes would be exploited.

"Oh I would so happy. I won’t think twice. I’m going to buy it," Cheng says.

It’s only a matter of time now before Meko discovers -- whether luck is on her side.  

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