Hong Kong developers preparing to push for removal of property cooling measures

PUBLISHED : Friday, 19 February, 2016, 9:35pm
UPDATED : Friday, 19 February, 2016, 9:53pm

The Real Estate Developers Association, which represents major Hong Kong developers, will call for a meeting to discuss whether the government should remove the cooling measures which have squeezed potential home buyers out of the market.

Stewart Leung Chi-kin, chairman of Reda said some members wrote to inform the association about their concerns on the impact of the cooling measures on the property market.

“We are now gathering other members’ opinions,” he said on Friday.

Leung said the association would discuss if they should have come up with a proposal to call for a removal of property cooling measures.

“[The measures] have been in place for more than three years, it’s time to review,” said Leung.

“The measures are affecting people’s lives,” said Leung, noting that end-users found it difficult to borrow sufficient funds to purchase a home.

To curb speculation, in February 2013 the government introduced a double stamp duty for buyers of second homes or through a company. They also imposed an extra 15 per cent buyers’ stamp duty on non-local residents. In 2012, the government introduced a special stamp duty of 10 to 20 per cent to penalise speculators flipping flats within three years.

The Hong Kong Monetary Authority in February last year ordered banks to tighten mortgage lending. The loan-to-value ratio for residential properties under HK$7 million was capped at 60 per cent, down from 60 to 70 per cent.

Developers and property agents including CK Property executive director Justin Chiu Kwok-hung have earlier called for the government to relax mortgage lending ahead of the Budget speech next Wednesday.

However, Secretary for Transport and Housing Anthony Cheung Bing-leung said on Thursday at the Legislative Council that the cooling property measures would remain in place.

Hong Kong home prices started to fall in September and have dropped 11 per cent so far.

Meanwhile, Sun Hung Kai Properties on Friday released the first batch of 108 units at Twin Regency in Yuen Long at an average of HK$11,360 per square foot, about 15 per cent lower than CK Property’s Yucci Square launched in the same district in November last year.

After factoring in an 11 per cent discount and a 5 per cent initial down payment, the selling price of Twin Regency was HK$10,138 per sq ft. The cheapest one is a 299 sq ft flat will cost HK$2.8 million, or HK$9,372 per sq ft.

“It is seldom for Sun Hung Kai Properties to offer units at below HK$3 million. The smaller lump sum payment mainly because of the mini- sized studio flats,” said Sammy Po Sui-ming, chief executive at Midland Realty’s residential department.

Meanwhile, the Government Property Agency on Friday announced Link Monte, a unit of The Link Real Estate Investment Trust, won the tender for the Trade and Industry Department Tower in Mong Kok for HK$5.9 billion.

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