People who are first group to purchase second hand white form Home Ownership units at free premium in Hong Kong could start to apply “ Purchase Qualification” from yesterday. They can choose the satisfied house among about 380,000 units of public house from Tenants Purchase Scheme and Home Ownership unit of which the premium is unpaid in the middle of the month at the soonest. Although the premium is free, but it is limited by the 30 years of warranty period from Housing Authority. The bank may deduct the building age when approving the mortgage which means the older of the building the shorter of the repayment period. Repayment period sharply shortened and current property price is high. These strike potential buyers’ buying intension. Some approved applicants went to Housing Authority to go through the procedures yesterday and expecting to be owner soon. But also some of them said they only can afford 10% as down payment. They frankly pointed they were worried about the mortgage approval and hoped the Authority can help with it. There were also potential buyers pointed the price of the second hand Home Ownership unit was too high and they would not exclude to give up the qualification. Member of Long Term Housing Strategy Steering Committee, Wang Kun suggested government supply extra 10 years of warranty period to help potential buyers buying the house.
The first group of potential buyers who approved for the 2,500 units of second hand Home Ownership in white form at free premium include 2,250 families and 250 single people. These families and single people can apply for “ Purchase Qualification” from Housing Authority or Real Estate Association with approval letter in 6 weeks since yesterday. Apply by mail delivery also accepted. The purchasing procedure will be reached in the middle of the month at the soonest. In the service center of Housing Authority in Lok Fu, the staffs set reception desks in the lobby before yesterday noon for applicants to go through the procedures. There were people who approved can’t wait and rushed to apply the “ Purchase Qualification” in Lok Fu as soon as they received the letter.
Price of Home Ownership crazily rose. Some approved applicants denied.
Mr. Chai whose wife will go into labor this month, is interested in two units which completed about 13 years before. One in Wu kai sha of New Territories and one in Fanling. His family income is HKD 25,000 each month. It is estimated he can afford property at about HKD 3 million at the most. But Mr. Chai only can afford 10% as down payment according to his financial capacity. So he hopes government can discuss with the bank to decrease half of building age of the free premium unit when calculating the mortgage. If not, the repayment period only has 17 years calculating base on 30 years of warranty period agreed by Housing Authority and the bank. It will make the repaying pressure sharply increase. He expressed again, it is not exclude that he will buy private house if the price of second hand Home Ownership continues rising. “ The price of Home Ownership in white form is rising. Private house in suitable price also can be one option.” . Another potential buyer, Mr. Li believed, the price of second hand Home Ownership rose too much and not worth to be bought. “ Still need to consider well even being approved during the draw lot.” But he does not worry about the mortgage.
Smart people signed the contract soonest as they can. Property price rose 10% more.
However, there were also smart people who approved had already targeted the house in May. Mr. Liu who has a family includes 4 members planed to move to Mong Kok. He took immediate action after knowing he was approved. Finally, a 3 rooms unit of Charming Garden in Mong Kok which had 17 years of building age was targeted. Mr. Liu signed the letter of commitment immediately with the owner and promised to buy the house at HKD 4 million before July. He felt fortunate he had signed the letter of commitment because the price had rose 10% recently. Private house is not in his consideration. “ HKD 4 million only can afford a 2 rooms unit which has no enough space for the whole family.” He pointed he would finish the trading as soon as possible after “ Purchase Qualification” is received. He planed to borrow 20% of the price from family. So mortgage will not be a concern.
Wang Kun appealed to extend warranty period to help young new buyer buying house.
Member of Long Term Housing Strategy Steering Committee, Wang Kun pointed, 30 years of warranty period made most of the approved potential buyers have less choice. It is hoped government can help to supply extra 10 years of warranty period. For example, the building age of Home Ownership unit is 25 years, then the mortgage repaying period would only is 5 years after warranty period minus building age under current policy. Housing Authority can extend 10 years of warranty period to make owners’ repaying period being extended to 15 years. He continued, second hand Home Ownership was not active because most of the units are for own occupation. Owner should buy a new one if they sell the current one. But current house supply is lack. “ Most owners not willing to sell their house worrying it will be difficult to purchase house after selling current one.” . This made the supply less.
Buying white form second hand Home Ownership at free premium scheme has 50,000 quotas. Next group of 25,000 applicants will receive approval letter in the end of December. As the same, the subscription period will also be one year.
