Tough measures to cool homes market
The government and the banking regulator have stepped in again to curb the city's red-hot housing market with one of the toughest combined measures ever.
The Hong Kong Monetary Authority announced a cut in mortgage loans for homes valued above HK$10 million to 50 per cent of the value of the property from 60 per cent, while for properties priced from HK$7 million to HK$10 million the amount able to be borrowed will be lowered to 60 per cent from 70 per cent. The total loan value must not exceed HK$5 million.
The authority also added tougher restrictions on non-resident borrowers by reducing by at least 10 percentage points the maximum loan-to-value ratio they could be offered for all mortgages including residential, offices and commercial property.
Analysts said the measures reflected the government's concern over the risks in the banking system, and could be a sign that it would start imposing different policies towards mainland buyers in Hong Kong.
The government also announced the launch of eight sites for sale between July and September in an attempt to increase land supply.
The sites are expected to offer about 6,000 flats - double the estimated 3,000 provided by the nine residential sites put up for sale in the April to June quarter.
The package of changes comes seven months after the administration announced an increase in stamp duty on homes resold within two years. The stamp duty was set as high as 15 per cent if a home was resold within six months.
'In view of the recent market situation, we think there is a need to boost our effort in, firstly, increasing land supply and, secondly, strengthen the risk management of the banking system,' Financial Secretary John Tsang Chun-wah said yesterday. Tsang said the government would monitor the market and impose more measures if needed.
Landscope Realty managing director Koh Keng-shing said the measures would trigger a turnaround in the already peaking housing sector which he said had experienced a recent drop in sales volumes, and stabilising prices.