Asia

Hong Kong to sell 'cheap' homes in world's least affordable city

HONG KONG (BLOOMBERG) – Hong Kong’s government is set to sell its first batch of cheap homes under a new programme to help people get on the property ladder in the world’s least affordable housing market.

The “starter homes” in Kowloon, across the harbour from Hong Kong Island, will be priced at about 38 per cent below market levels – or around HK$13,000 (S$2,276) per square foot, the Hong Kong Economic Journal reported Wednesday (Dec 19), citing unidentified sources. People can apply from January, it said.

The initiative will “accommodate a very small portion of those wanting to get on the housing ladder,” said Denis Ma, head of research at Jones Lang LaSalle Inc.

Another government programme to provide cheap apartments this year saw more than 260,000 applications for 4,431 flats, while home ownership has tumbled to the lowest level in nearly 30 years.

Chief Executive Carrie Lam promised the starter-home programme in her inaugural address in 2017, while other initiatives since then include plans to build homes on artificial islands and a vacancy tax on unsold apartments.

Those eligible for the 450 starter homes include single permanent residents who earn no more than HK$37,000 a month and don’t already own homes. Buyers face restrictions on reselling, the Economic Journal reported.

Despite a dip in the past four months, Hong Kong’s home prices are almost 50 per cent higher than five years ago, according to Centaline Property Agency. The government said Tuesday the market is having an orderly correction.

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