Hong Kong Policy Address 2019 and its Impact on Home Buyers

Posted: Oct 30 2019Last Updated: Oct 30 2019

30 October 2019 - On 16 Oct 2019, Chief Executive of Hong Kong, Mrs Carrie Lam, made her third annual policy address since assuming office in 2017. 

The Chief Executive’s 2019 Policy Address covered four key topics including a) Housing; b) Land Supply; c) Improving People’s Livelihood; and d) Economic Development. Two of these have an immediate and direct impact on the property landscape of Hong Kong, making it more viable for Hong Kong residents to become home owners. 
These measures target a number of different demographics, and in particular, first-time home buyers as well as at risk and lower income households. This should help to alleviate some of the pressure surrounding home ownership in the city that is known for its exorbitant real estate prices. 

Some of the key highlights that will be of particular interest to those keeping watch on the real estate sector are as follows:

  1. Increase in the Loan-to-Value (LTV) Ratio

Perhaps one of the most significant impacts to the Hong Kong real estate market in the Policy Address 2019 comes from the change in the LTV ratio for property buyers.

Under the Mortgage Insurance Program, property buyers can now get up to 80% LTV ratio on property that is valued at up to a maximum of HK$10 million. This is up from a previous limit of HK$6 million.

First-time home buyers are also now eligible for a 90% LTV ratio on property that is valued at up to a maximum value of HK$8 million, up from a previous limit of HK$4 million.

LTV ratios and their eligible property value

Max LTV Ratio


90% (First-time home buyers)

Property Value (Existing)

≥HK$6 million

≥HK$4 million

Property Value (New)

≥HK$10 million

≥HK$8 million

Source: HKMA Press Release

  1. Increase in the supply of transitional housing

In Hong Kong, transitional housing refers to the strategic use of idle sites or vacant properties which are otherwise unsuitable for development into more permanent accommodations to temporarily house vulnerable individuals or households who are transitioning into longer term accommodations. 

There are currently less than 1,000 such accommodations in Hong Kong and in the recent Policy Address, the government has pledged to add a further 10,000 units over the next three years by maximizing the use of vacant government land, public facilities and land lent by private owners. This will help to address some of the housing issues faced by the at risk households within the community.

  1. Expediting the resumption of land for new housing

The resumption of land refers to the government acquisition of land from third parties in order to redevelop it for the purpose of providing services and other community facilities.

In the Policy Address, the government of Hong Kong committed to expedite the resumption of up to 700 hectares of land for the purpose of developing more housing and Starter Homes. Of this 700 hectares, 400 will be resumed in the next five years, an amount which is substantially more than the 20 hectares resumed in the five years prior.  

The three types of land expected to be resumed include:

  1. privately owned brownfield sites in the New Territories (such as Ping Shan in Yuen Long and Lam Tei in Tuen Mun);
  2. private land that has already been identified in current zoning plans for high-density housing; and
  3. private land located in Cha Kwo Long, Ngau Chi Wan and Chuk Yuen United Villages.  


  1. Accelerating the sale and supply of housing through various government schemes

In its Policy Address, the Hong Kong government made the announcement to accelerate the sale of 42,000 flats across 39 estates under the Tenancy Purchase Scheme (TPS). Under the TPS, tenants of public housing are able to purchase their flats at significantly discounted rates, averaging about 20% the assessed market value.   

They also made the commitment to put up an additional 12,000 flats for sale under the Home Ownership Scheme (HOS) and Green Form Subsidized Home (GSH) by 2020.


In summary, the Hong Kong Policy Address 2019 introduced several new initiatives and policies which will help make home ownership easier for many a wide range of people with different needs and aspirations including investors and first-time home buyers.

Given that the Hong Kong property market has been seeing some downward pressure for most of 2019, the new policies could come as a welcome change which would help increase both demand and supply. Under normal circumstances, this expansionary policy could have an effect of driving property prices up. However, in light of the existing downward pressure in recent months, prices could instead stabilize and might present a good opportunity for those who have been waiting on the sidelines to enter the market.


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