Hong Kong Chief Executive Donald Tsang said on Wednesday that the government would resume the Home Ownership Scheme (HOS), a subsidized sale program of public housing, in response to the need of low and middle-income families to buy their own homes.

The new scheme would be targeted at families with a monthly household income under 30,000 Hong Kong dollars (about 3,856 U.S. dollars), mainly first-time home buyers, who were unable to bear large down payments and mortgage repayments, said Tsang in his annual policy address delivered at the city's Legislative Council, also the last one in his tenure.

With the sites identified at this stage, the government planned to provide more than 17,000 flats over four years from 2016, with an annual production of between 2,500 and 6,500 flats, according to the chief.

Flats, which could be expected to be ready for the first batch' s pre-sale in 2014 or 2015, with a saleable floor area of 36 to 45 square meters, would be offered at affordable prices set in the range of 1.5 million to 2 million HK dollars.

Usually, flats sold under the HOS are about 30 and 40 percent cheaper than the market price.

"We will set our planning target at 5,000 flats a year on average. To be flexible, the actual number of flats to be built or put up for sale each year will depend on demand at the time," Tsang said.

When there were enough reasonably priced small and medium flats in the private market, the building and selling of subsidized flats might be stopped, Tsang added.

As in the previous HOS, instituted in the 1970s as part of the government policy, five years after purchasing, owners might sell the flats on the open market after paying a premium.

Apart from restarting the HOS, the government would also revise other public housing policies to assist lower income families, including long-term commitment to providing Public Rental Housing (PRH) and enhancing the "My Home Purchase Plan" (MHPP), a plan to provide "no frills" small and medium rental flats to give families time to save up.

About 75,000 PRH units would be completed in the next five years, with an average of 15,000 units each year, said Tsang, who also promised to meet the target of maintaining an average waiting time of three years for general waiting list applicants.

"Under no circumstances will this policy be changed," Tsang said.

As a way of revising the MHPP, a new mode of "buy-or-rent" option would be offered, besides the proposed "rent-and-buy" mode, allowing participants to buy their MHPP flats direct at the market price without going through a rental period.

The first development project will provide around 1,000 "no frills" small and medium flats, which were expected to be completed in 2014.

Statistics showed property prices in August this year increased almost 18 percent year on year. The mortgage to income ratio was 47 percent in the second quarter of this year.

"Both figures indicate that people face greater pressure and higher risks in home purchase," Tsang said.

The new HOS and the enhanced MHPP, together with the measures implemented, such as increasing land supply, combating speculative activities, ensuring the transparency of the property market, and preventing excessive expansion in mortgage lending, would " contribute to the healthy and steady development of the property market", said Tsang. (1 U.S. dollar equals to 7.78 Hong Kong dollars)