Several lawmakers on Monday questioned how the government decided on a discount of 35 percent for homes to be built under a new subsidised housing scheme.

Private developers are being urged to build flats on government sites or their own rezoned land, with two plots in Chai Wan and Tung Chung already earmarked for the scheme.

The units will be sold at 65 percent of the market rate, and in return, developers will only have to pay one-third of the land premium for their own plots.

At a Legco panel meeting, lawmakers including the DAB's Chan Hok-fung and the Federation of Trade Unions' Stanley Ng questioned why the discount is linked to the flats' market value, but not the affordability of homebuyers.

Ng noted that the subsidised flats would still be unaffordable for many people if home prices in the city were "sky high".

Another councillor, Scott Leung, asked if there could be changes to the discount figure in future.

Housing chief Winnie Ho said the government came up with the 35 percent deduction after noting that this year's Home Ownership Scheme (HOS) flats are being sold at a 38 percent discount.

She said the government has to balance the attractiveness of the flats to potential homebuyers with the profitability of developers, saying it is important for officials to make the numbers clear at the beginning.

"If we don't provide fixed figures when we put out this scheme, the private developers won't be able to calculate their financials before they submit any application," Ho told lawmakers.

The minister said she hopes developers who join the scheme can make small profits with a quick turnover, noting that there is major demand for subsidised flats as recent HOS schemes were over-subscribed by 27 times.

She also said that flats under the new scheme can be purchased before their completion.