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Written by: Commentary Editing Room
2021-06-16 17:30
Last update date: 2021-06-16 17:31
Urban Renewal Authority Chairman Zhou Songgang said at a meeting with the media on Tuesday (15th) that the Financial Secretary has approved a new five-year business plan, the largest scale in history, and said that this year will enter the harvest period.
However, he also said that due to financial constraints, it is difficult to launch the "first-homed market" every year.
However, as a statutory body, the URA is not an ordinary developer. When the public is faced with heavy pressure to purchase properties, the URA should not give up social responsibility for the sake of market logic.
In the latest five-year business plan, the URA is expected to provide 18,000 residential units at a total cost of 100 billion yuan, of which there will be two "first-homed-on-board" projects.
The first is the Tai Hang Sai New Village redevelopment project co-operated by the Bureau and Ping Man Housing Co., Ltd., of which 2,000 units will be allocated for first-home use and will be pre-sold in 2026.
The other project is the "Huan Ran Yi Ju Phase II" located on Chuntian Street and Chongzhi Street. The project will provide 260 "first home" units and plans to pre-sale uncompleted units in 2023.
The URA has made persistent efforts to introduce more "first home" units, which can certainly meet the people's ardent demand for home ownership.
In 2019, when the "Renewable Home" was launched, more than 20,000 applications were received, which was over-subscribed by more than 45 times. Later, when the URA launched the remaining 43 units, it recorded 113 times more applications. The public’s response was very enthusiastic. It can be seen that the "first home buyers" were sold at a 62% discount on the market price. In addition, the loan arrangement of up to 90% of the mortgage also reflected the huge demand for home ownership of the "sandwich class". The intention to develop two "first home" projects is also in line with the needs of the society.
The URA has transformed itself into a demonstration unit.
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Difficult to balance the market and citizens
However, when the demand for home ownership has not yet been met, the URA seems to have focused on financial figures.
Zhou Songgang said that the first home buyers were sold at below market prices, which would also affect the return of funds and slow down the progress of other URA projects. Therefore, do not expect that "so many first home buyers will be launched every year." Chief Executive Wei Zhicheng expected the bureau. There will be negative cash flow from 2024, and then bank loans, bonds and other methods of financing turnover may be required.
However, in the 20 years since its establishment, the URA has recorded a surplus almost most of the time.
Although the surplus has fallen in the past two years, it is believed that the accumulated surplus has not been exhausted due to the bumper harvest in the early years.
Furthermore, apart from the original goal and positioning of the URA for urban renewal, the Policy Address has repeatedly instructed the URA to provide more subsidized housing in recent years. Therefore, the URA should not give up serving the public just because of some financial worries. Provide affordable housing.
Of course, the construction of subsidized housing will affect the financial capacity of the URA, and the Government must also help resolve its financial troubles.
Although representatives of the bureau have stated that there is no need to seek capital injection from the government even if there is pressure on the flow of funds in the future, the government may provide interest-free loans to the bureau, which can not only reduce the interest expenses on bank loans or bonds, but also save money. The expenditure subsidy part of the price difference of the "first order".
In the long run, the Hong Kong Government has abundant fiscal reserves. When using it, you can refer to the earlier establishment of the "Housing Reserve Fund" and allocate some resources from it to ensure that the URA's financial resources can complete the "first home" project. Its effectiveness is similar to that of the Housing Authority. The agreement is similar.
These two measures can not only solve the financial pressure of the URA, but also satisfy the people's ardent demand for housing.
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