27. Flats sold under the new HOS will be subject to resale restrictions as in previous subsidised housing schemes. Our initial plan is that within the first five years from the date of purchase, owners may only sell their flats to green form applicants or the Housing Authority. After five years, owners may sell their flats on the open market after paying a premium to the Housing Authority. This will enable owners to trade up and shift to the private residential market. In light of the rather inactive HOS secondary market, I have asked the Housing Authority to seriously consider measures that can facilitate upward mobility of those in the new scheme. When calculating the premium to be paid, the Housing Authority may take the subsidised portion of a unit's purchase price as a loan to the owner, the amount of which will not be adjusted even if the market value of the unit increases in future, and require the owner to repay this loan to the Housing Authority before selling the unit on the open market. When working out the details, however, we will ensure that the new arrangements are fair to existing HOS flat owners. As the arrangements will involve subsidising home ownership with public money, they should also be acceptable to the community as a whole.
28. I will ask the Housing Authority to work out implementation details of the new HOS, including the allocation ratio between green form and non-green form applicants, income and asset criteria for non-green form applicants, price benchmarks based on affordability and premium payment arrangements.
29. The new HOS will serve as a buffer when the private residential property market is in disequilibrium due to unbalanced demand and supply, as well as internal and external macroeconomic factors such as low interest rates and quantitative easing measures taken by other economies.
30. When the private residential property market cannot provide enough reasonably priced small and medium flats, the Housing Authority will make available a maximum of 5 000 new HOS flats on average each year for eligible buyers. When there are enough reasonably priced small and medium flats in the private market, we will adjust the number of subsidised flats to be built and sold for the year. We may even stop building and selling such flats.