(Bloomberg) -- Hong Kong's government is set to sell its first batch of cheap homes under a new program to help people get on the property ladder in the world's least affordable housing market.
The “starter homes” in Kowloon, across the harbor from Hong Kong Island, will be priced at about 38 percent below market levels -- or around HK$13,000 ($1,662) per square foot, the Hong Kong Economic Journal reported Wednesday, citing unidentified sources. People can apply from January, it said.
The initiative will “accommodate a very small portion of those wanting to get on the housing ladder,” said Denis Ma, head of research at Jones Lang LaSalle Inc.
Another government program to provide cheap apartments this year saw more than 260,000 applications for 4,431 flats, while home ownership has tumbled to the lowest level in nearly 30 years.
Chief Executive Carrie Lam promised the starter-home program in her inaugural address in 2017, while other initiatives since then include plans to build homes on artificial islands and a vacancy tax on unsold apartments.
Those eligible for the 450 starter homes include single permanent residents who earn no more than HK$37,000 a month and don't already own homes. Buyers face restrictions on reselling, the Economic Journal reported.
Despite a dip in the past four months, Hong Kong's home prices are almost 50 percent higher than five years ago, according to Centaline Property Agency. The government said Tuesday the market is having an orderly correction.
To contact the reporter on this story: Shawna Kwan in Hong Kong at wkwan35@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Paul Panckhurst, Fion Li
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