Media

A new form of HOS – A win-win-win solution for the government, HOS owners and the society

08 Feb 2012

The government has recently announced five possible schemes of land premium repayment after resale of the new Home Ownership Scheme (HOS) units in the private market. One of the purposes is to enhance liquidity of the secondary HOS market, which is important to reduce economic waste. The proposed schemes are considered to be "old wine in a new bottle" and are likely to be divisive of the community.

Studies at the Department of Real Estate and Construction of the University of Hong Kong (HKU) propose a new form of HOS with different property rights, which can solve many of the inherent problems of HOS, The main features of the new HOS include building on land with non-renewable lease of 50 years the new HOS units. Based on an analysis of more than 6,000 transaction records with different length of land leases, it is estimated that under the rental yield, the new HOS units can be sold at a natural 20% cheaper than similar private housing units. A relatively smaller government subsidy is needed to make the new HOS units affordable and thus no repayment of land premium is needed. Moreover, there will be more choices of housing units with different lengths of land tenure after implementation of the new scheme for some time and hence an active secondary market can be maintained.

HKU researchers also looked into more than fifty HOS projects completed between 1989 and 1998 and have come up with recommendations on contract arrangements with private developers under PSPS (private sector participation scheme) which can speed up the building process and at a lower cost.

Professor Chau Kwong Wing of the Department of Real Estate and Construction will meet the media tomorrow (February 9) with his research team to explain the findings and proposals. Details as follows:

Date: 9 February 2012 (Thursday)
Time: 11 am
Venue: Room 701, 7/F., Knowles Building, HKU

For media enquiries, please contact Ms Trinni Choy (Assistant Director (Media), Communications and Public Affairs Office) tel: 2859 2606 email: pychoy@hku.hk  or Ms Melanie Wan (Manager (Media), Communications and Public Affairs Office) tel: 2859 2600 email: melwkwan@hku.hk .