‘Least affordable’ Hong Kong aims to sell ‘cheap’ homes
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‘Least affordable’ Hong Kong aims to sell ‘cheap’ homes

ADMINISTRATORS in Hong Kong look set to sell its first batch of subsidised flats in a pilot “starter homes” project in its bustling Kowloon district.

Nestled across the habour from Hong Kong Island, the starter homes will be priced at nearly 40 percent below market levels at around HK$13,000 (US$1,661) per square foot, according to the South China Morning Post.

From January, interested home buyers can begin applying for the homes, sources said, adding the Urban Renewal Authority board overseeing the scheme approved the pricing on Tuesday.

SEE ALSO: Hong Kong’s plan to remove tax waivers threatens wealthy landlords 

Earlier, the board had decided that the 450 flats in Ma Tau Wai in Kowloon would be put up for sale for discounts of up to 38 percent.

A board member from the authority who declined to be named said: “I think it’s a reasonable price, and I believe the project will be popular, as all URA projects have been, due to their urban location and convenient transportation.”

“For young couples who are buying their first flat, it’s still acceptable,” the member told the South China Morning Post.

“At least they’ll have a higher degree of freedom and independence compared to living with their parents.”

Measuring from 260 to 510 sq ft, the starter homes could be sold at a knockdown price of about HK$3 million (US$383,406) to HK$7 million (US$894,634), sources said.

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Hong Kong’s notoriously expensive housing market will be seeing ‘cheap’ homes sold in Kowloon beginning next year. BookyBuggy/Shutterstock

Denis Ma, head of research at JLL, told Bloomberg the initiative will “accommodate a very small portion of those wanting to get on the housing ladder.”

The starter homes would compliment another government programme providing cheap apartments which saw more than 260,000 applications for 4,431 flats as home ownership dipped to its lowest level in nearly three decades.

In 2017, Hong Kong Chief Executive Carrie Lam pledge to initiate the starter-home programme in her inaugural address and has since announced plans to build homes on artificial islands and imposed taxes on unsold apartment units.

SEE ALSO: Hong Kong no longer the most expensive city in Asia for expat

To qualify for the 450 starter homes, applicants must have single permanent resident status with an income below HK$37,000 (US$4,728) a month. They must also be first-time home buyers.

However, the buyers would face restrictions on reselling the properties.

Citing the Centraline Property Agency, Hong Kong’s Home Prices are almost 50 percent higher than five years ago despite a dip in the past four months. On Tuesday, the government said the market is having an “orderly correction.”