Chief Executive John Lee said the Government would strive to “improve livelihoods in pursuit of happiness” as he announced in today’s 2024 Policy Address that the Monetary Authority (HKMA) will adjust the maximum loan-to-value ratio for all properties to 70% and that a new system will be devised to raise standards in subdivided units (SDUs).

Mr Lee also gave an update on efforts to increase the supply of public housing, and said steps will be taken to widen access to the housing ladder, combat public rental housing tenancy abuse, and create land to build more housing.

The Chief Executive said that taking into account the current economic and financial environment, the HKMA will adjust the maximum loan-to-value ratio for residential and non-residential properties to 70%, regardless of the value of the properties, whether the properties are for self-use or held by companies, and whether the purchasers are first-time home buyers. The maximum debt servicing ratio for properties will be adjusted to 50%.

Acknowledging that “housing is an issue of great public concern”, Mr Lee said public housing supply in the coming five years to 2030 will reach 189,000 units, about 80% higher than in the five years to 2027. He added that in the past two years, the average waiting time for public rental housing dropped by half a year, from a peak of 6.1 years to the current 5.5 years, and is expected to fall to 4.5 years in 2026-27.

On the issue of SDUs in residential buildings, Mr Lee said that the Government has decided to put in place, through legislation, a new system with regard to their rental. SDUs that meet required standards will be categorised as Basic Housing Units (BHUs), and owners of substandard SDUs that are upgraded to meet these standards can apply for BHU recognition. However, following a grace period, owners who continue to rent out substandard SDUs will be held criminally liable.

The Government will set up a system allowing owners of pre-existing SDUs under rental to register for the grace period. The Government will allow time for those registered owners to carry out the necessary conversion works. New SDUs entering the market must be recognised as up-to-standard BHUs before they can be rented out.

The Secretary for Housing will be empowered by law to decide, upon expiry of the grace period, when to take enforcement actions against substandard SDUs by batches in an orderly manner in light of actual circumstances.

The Government proposes that the standards of BHUs should include the provision of windows, an individual toilet and a floor area of no less than 8 sq m. The Deputy Financial Secretary and the Secretary for Housing will announce the details and seek the views of LegCo and stakeholders for drawing up the legislative proposals and related measures, such as the timetable for registration.

Addressing the public aspiration for home ownership, Mr Lee said the Housing Authority (HKHA) is aiming to gradually adjust the ratio between public rental housing (PRH) units and subsidised sale flats (SSFs) from the current 7:3 to 6:4. Meanwhile, the ratio between Green Form and White Form in respect of Home Ownership Scheme (HOS) flats will be revised from 4:6 to 5:5 to encourage more PRH tenants to buy HOS flats. The HKHA will tighten up its Well-off Tenants Policies by raising the additional rent limit and lowering the income limit for well-off tenants, so that public resources are appropriately allocated to applicants in need.

With regard to PRH tenancy abuse, the HKHA will launch the “Cherish Public Housing Resources Award Scheme” in January next year to offer rewards to persons who provide concrete intelligence that leads to identification of tenancy abuse.

Mr Lee also outlined plans to create more land for housing. He said that in order to streamline land development procedures and cut red tape, the Government has promulgated an internal circular stating that all approving departments should take a facilitating role.

He added that the Government will outsource drone inspections of external walls of buildings and unauthorised building works to enhance speed and efficiency. The purview of the Development Bureau’s Development Projects Facilitation Office will be expanded to facilitate co‑ordination with departments in expediting the approval of land use and related matters in the Northern Metropolis.

Mr Lee gave an update on the Kau Yi Chau Artificial Islands project, reporting that the statutory environmental impact assessment process for the reclamation works will commence by the end of this year. Completion of the relevant approvals is targeted for next year.