More property curbs may be needed: adviser

PUBLISHED : Sunday, 15 August, 2010, 12:00am
UPDATED : Sunday, 15 August, 2010, 12:00am

A top government adviser has voiced uncertainty about the government's latest measures to control housing prices, saying officials might also need to consider curbing overseas investment in Hong Kong's overheated property market.

Anthony Cheung Bing-leung (pictured), chairman of the Housing Authority's subsidised housing committee and an Executive Council member, said in a radio interview yesterday that it was hard to predict whether the newly introduced measures would be effective.

'The government may need to consider further measures, such as limiting overseas investors' purchase of Hong Kong flats' if they remained unaffordable to residents, Cheung said.

On Friday, government officials and banking regulators responded to the public outcry over soaring flat prices by introducing restrictions on market speculation, increasing land supply and imposing additional limits on mortgage lending.

For properties costing HK$12 million or more and all properties not for owner occupation, banks will have to cut loans from the existing 70 per cent of the property's value to 60 per cent, according to the Hong Kong Monetary Authority.

To deter speculation, Financial Secretary John Tsang Chun-wah also banned confirmor transactions - resales before a purchase is completed - of uncompleted new flats.

While Cheung expressed uncertainty about the effectiveness of parts of the new measures, he said they would increase the cost of confirmor deals. Property agents reacted to the measures with scepticism yesterday, saying the new rules would have a short-term impact but do little to change the overall market.

At a salesroom for Sun Hung Kai's luxury residential project Larvotto in Ap Lei Chau yesterday, a Hong Kong Property agent said the new measures had not affected interest in the multimillion-dollar properties. The agent said most of the sales had already been completed; only one of the Larvotto sales was a confirmor transaction.

'There were around six 990 sq ft flats left two to three days ago, but more than six buyers are actually looking to buy such a flat because they think the price is reasonable,' the agent said. A flat on one of the upper levels cost around HK$14 million.

A Centaline agent said the new measures could spur the secondary market. 'These measures will actually boost the second-hand flat market, because the owners are more willing to lower their prices,' he said.