(Bloomberg) -- New World Development Co. outlined plans to sell homes at half of their market price, helping address the city's housing crisis that's become a flashpoint for social grievances.
The builder, one of Hong Kong's biggest, will fund the development of a project that is expected to provide 300 one- to three-bedroom private units in a first stage, it said in a statement on Monday.
The company's non-profit organization, New World Build For Good, will develop the homes, which will be offered at roughly 50% to 60% of the market price. New World said it expects sales will cover construction costs and won't generate surplus income.
The program, which will become the first subsidized housing project initiated by the private sector, underscores the increasing attention developers are paying to the world's least-affordable housing market. Local government and builders are coming under mounting pressure to alleviate the crunch after Beijing marked out the Asian financial hub's expensive residential property market as a priority.
In New World's proposal, buyers can purchase the subsidized apartments with down payments of as low as 5%, compared with at least 10% for homes in the private market.
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“As a major corporation in Hong Kong, we have the responsibility to give back to our people and alleviate the city's livelihood issues,” New World Chief Executive Officer Adrian Cheng said in the statement. “We hope that it will inspire more actions to collectively build a better future.”
Once the government approves the proposal, New World will donate a land site in Hong Kong's New Territories to build the apartments.
The announcement comes two weeks after the company said it was planning a subsidized housing program, without providing further details. So far, the government has initiated and sold projects to help people with a lower income get on the property ladder.
Housing affordability was seen as a catalyst for 2019's mass protests, which led to the imposition of a national security law.
Since the demonstrations, Hong Kong's major developers, including New World, have also donated farmland to build homes for the underprivileged waiting for public housing.
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