35.     After considering public views, we will enhance the MHPP.  First, apart from the proposed “rent-and-buy” mode, we will offer a “buy-or-rent” option which allows participants to buy their MHPP flats direct at market price without going through a rental period.

36.     Under the MHPP, the initial market selling price will serve as the ceiling price of that flat.  A participant choosing the “rent-and-buy” option will be guaranteed the “ceiling price” regardless of any rise in property prices within two years after termination of tenancy.  This will protect participants from soaring property prices disrupting their plan for home ownership, and enable them to set more specific saving targets.  Should prices fall, they can buy MHPP flats at the prevailing market price.  The THB will discuss with the HKHS the implementation details.

37.     The Government has already earmarked a number of sites for about 5 000 MHPP flats.  The first development project at Tsing Yi will provide around 1 000 “no frills” small and medium flats.  These are expected to be completed in 2014 and pre-letting will begin next year.

38.     The new HOS and the enhanced MHPP, together with the measures implemented over the past year or so, such as increasing land supply (including selling sites with flat size and flat number stipulations), combating speculative activities, ensuring the transparency of the property market, and preventing excessive expansion in mortgage lending, will contribute to the healthy and steady development of the property market.

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