Temporary Homes, Looser Mortgage Rules On The Way

Chief Executive Carrie Lam announced in her policy address on Wednesday that 10,000 transitional flats will be built in the coming three years for people who are on the waiting list for public housing.

Describing Hong Kong's housing woes as one of the root causes of the current turmoil in society, she also announced a relaxation of restrictions on mortgages.

Lam said the government will allocate HK$5 billion – up from HK$2 billion previously – for the construction of transitional flats, which will be on government land as well as sites leased from private developers.

She said cash allowances and rent subsidies will also increase for those in the queue for public housing, with the details yet to be worked out.

The Chief Executive also announced a relaxation of mortgage restrictions for first-time buyers to enable them to borrow more.

Currently, through the Hong Kong Mortgage Corporation’s mortgage insurance scheme, buyers can get as much as 90 percent of an apartment’s value for homes that cost below HK$4 million. This ceiling will be raised to HK$8 million.

Lam also revealed that the cap on the value of flats eligible for a mortgage loan of up to 80 percent of the price will be raised from HK$6 million to HK$10 million.

She said the government will also speed up the sale of subsidised flats under construction under the Home Ownership Scheme, with 12,000 to be sold next year.