Income and asset limits for public rental housing applicants will be moderately adjusted for 2004-05 to ensure rational allocation of limited housing resources to those in genuine need.

From April 1, income and asset limits will be lowered an average of 4.3% and 8.9% respectively. For four-person households, the income limit will go down from the current $14,600 to $14,000 whereas the asset limit will fall from $380,000 to $350,000.

The Housing Authority's Subsidised Housing Committee said the adjustments reflect essentially the downward movements of the two key variables determining the limits - the Consumer Price Index and rent levels on the private market - since the last review in March 2003.

"The new limits will only apply to new applicants and those registered but have not gone through the vetting stage by March 31, so as to minimise the adverse impact on the existing applicants," committee chairman Ng Shui-lai said.

Applicants who fail in the income/asset test but subsequently become qualified under the prevailing eligibility rules because of the income/asset limits revisions or substantiated changes in family circumstances can reinstate their original public rental housing applications within two years.

Despite the adjustments, some 123,100 households or 35.2% of the non-owner occupier households living in private flats in Hong Kong will remain eligible for public rental housing, higher than the average of 114,500 households or 33.4% during the 10-year period from 1993/94 to 2002/03.

The committee will re-visit the formula for deriving the waiting list income and asset limits before next year's review.