Little Hong Kong: Subsidised housing sold at market price? I’m serious (Part 31)

De Novo, a subsidised housing project developed by the Urban Renewal Authority (“URA“) in Kai Tak, is selling the remaining unsold flats at market price.  It happened like this.  There are 484 flats, 338 of which were allocated as subsidised housing at 20% discount from market price, and the remaining 146 flats allocated for people displaced by the URA’s redevelopment projects.  So, subsidised housing.  Great, right?

People thought the subsidised housing project too expensive

De Novo’s “market price” was set as of December 2015.  When it was put into the market in mid-2016, many applicants (thinking they were applying for subsidised housing) withdrew their applications as they felt a 20% discount from December 2015 prices was still too expensive.  Thus, some “subsidised” flats remained unsold.  There are now 16 vacant flats that no one wants.  In an overheated market like Hong Kong, this says a lot.

Government decides to sell subsidised flats at market price

Apparently, because the URA considered that the market has “recovered”, it decided to put all 16 subsidised flats on sale at market price.  Read the previous sentence again.  Something isn’t making sense here.  When people thought subsidised housing was already too expensive, the Government decided to raise the price to market rate.  Please explain this logic to me.  I feel that I’m too intellectually inferior to understand this.

What is the purpose of subsidised housing that isn’t subsidised?

Perhaps I was naive to think that the purpose of subsidised housing was to allow people who can’t get into public housing, but otherwise can’t afford private housing, to get on the property ladder.  It was intended to be a stepping stone to alleviate the public housing burden.  I’m not sure how selling subsidised housing as private housing would achieve this purpose.  Unless that had never been the URA’s purpose all along and I just didn’t get the memo.

And what is the “market price”?  Market price in Kai Tak, where the K. City development set its prices at an average of HK$21,300 per sq ft?  Or at the Vibe Centro development selling for an average of HK$24,200 per sq ft?  The funny thing is that the URA will hold a ballot next Tuesday, to determine the order of priority for potential buyers at the De Novo development.  Like it’s going to be a lottery to buy subsidised housing at market price.  Has the URA hit a jackpot?

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