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Tuesday, August 23, 2016, 21:15

'Homes for Hong Kong people' hit market

By Luo Weiteng in Hong Kong
'Homes for Hong Kong people' hit market
De Novo — a popular middle-class residential project in the Kai Tak redevelopment area. The “Hong Kong Property for Hong Kong People” program is part of the government’s efforts to curb a property buying spree by non-local residents and provide affordable homes for middle-class citizens amid tight supply and demand. (Parker Zheng / China Daily)

The first batch of apartments completed under a four-year-old pilot program to build homes exclusively for Hong Kong people was launched on Tuesday.

Hong Kong-listed China Overseas Land and Investment Ltd (COLI) — the second-largest Chinese mainland developer by market value — unveiled the show apartments at its One Kai Tak project after having obtained pre-sale consent for the venture last week.

One Kai Tak, which offers a total of 545 apartments, is the first private residential development project completed under the “Hong Kong Property for Hong Kong People” (HKPHKP) program announced by Chief Executive Leung Chun-ying in his 2012 election manifesto.

Two plots of land at Kai Tak — the site of the city’s old airport in Kowloon — were awarded to COLI in mid-2013 under 50-year land grants for a total of HK$4.54 billion. The total number of apartments to be built on the two sites will be about 1,145.

Under the program, buyers are restricted to Hong Kong permanent residents. Homes owners are only allowed to resell their apartments to permanent residents within three decades, and can lease them to local and non-local tenants for not more than five years. All resale and rent agreements are subject to approval by the Lands Department.

The policy is part of efforts to curb a property buying-spree by non-local buyers and provide affordable homes for middle-class citizens amid tight supply and demand. The project, however, had been somehow put on hold after COLI had secured the sites.

Leung said in 2014 the pilot program would only be used when the real estate market showed signs of overheating. However, the market has cooled down following the imposition of several anti-speculation measures, including a 15-percent stamp duty on sales of apartments to non-local residents, leaving the program in a state of suspension.

Property purchases in Hong Kong by non-local residents fell to an average of 2 percent of total transactions last year, indicating that local purchasers formed the mainstay of buying power and may not deem restrictions attached to the One Kai Tak project as a major concern, said Tony Yau Wai-kwong, managing director at COLI affiliate China Overseas Property.

The developer is expected to unveil the price tags for the first batch of 109 apartments at One Kai Tak this week, with the price range referred to properties along the Kowloon and Olympic MTR stations.

Vincent Cheung Kiu-cho, Hong Kong-based valuation and advisory services chief at Colliers International, told China Daily it’s the pricing rather than the restrictions that would make local buyers step back.

Basically, the median sale price for properties along the Kowloon and Olympic MTR stations is set at HK$25,000 per square foot. A cluster of new private residential apartments have entered the fray lately, including Chinachem Group’s the Papillons at Tseung Kwan O and Nan Fung Group’s Island Garden in Shau Kei Wan, piling pressure on developers in setting their prices.

Cheung noted that, given its geographical advantage, One Kai Tak stands as an attraction for buyers in the event that the developer sells the units at a 20-percent discount.

But, the once-touted HKPHKP program has proved to be ineffective in offering affordable homes amid debate over whether it should eventually be scrapped.

The two sites at Kai Tak have been the only plots sold under the program so far. Cheung said the apartments to be built there are likely to be the first and last under the pilot program.

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