Policy Address

27.       The Plan has the following merit:

(1)        It provides the sandwich class with flexibility in their home purchase plan, including the choice of opting to purchase the flat they rent, another flat under the Plan, or a flat in the private market;
(2)        It provides them with rental flats for a maximum of five years so that they will have sufficient time to think through their housing plan while building up their capability to buy a flat.  This means they will not have to rush into buying flats that are over-priced during short-term fluctuations in property prices.  Also, there will not be any rental adjustment during the five-year period.  This will help them save for part of the down payment for their future flat purchase;
(3)        There will be no re-sale restrictions or premium payment requirement as is the case of conventional HOS flats.  This will facilitate upward mobility in the property market;
(4)        Flats under the Plan will, to an extent, fill the supply gap of “no-frills' flats in the first-hand private market; and
(5)    The Plan will not reduce the supply of private residential land or land for PRH, as the land will not come from either the Application List or the sites earmarked for PRH.

28.       The subsidy equivalent to half of the net rental paid may not be sufficient to cover the down payment in full.  Tenants must conscientiously build up savings to meet the down payment and related expenses.  The Plan reflects Hong Kong people's spirit of self-reliance by enabling them to make their home purchase wish come true in a practical and step-by-step manner.  The Secretary for Transport and Housing will announce details of the Plan later.

29.       The Government has already earmarked sites in Tsing Yi, Diamond Hill, Sha Tin, Tai Po, Tuen Mun and other areas for a total of some 5 000 flats to be built under the Plan.  The first project will provide about 1 000 flats in Tsing Yi by 2014.

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