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Hong Kong Monetary Authority (HKMA)

Home prices remain stable after HKMA's cooling measure

Property agents see no change in sales volume, and expect business to pick up again soon

PUBLISHED : Sunday, 16 September, 2012, 12:00am
UPDATED : Sunday, 16 September, 2012, 3:00am

Property sales remained steady yesterday after Hong Kong's central bank clamped down on second mortgages to combat the US Federal Reserve's third round of quantitative easing measures (QE3) and major developer Sun Hung Kai Properties cut the prices in its new Tuen Mun project.

Property agents said the sales of second homes were stable compared with a week ago.

"Only two flats at Taikoo Shing were sold yesterday, the same as a week ago. And there was no increase in visitors," said Centaline Property director Patrick Tsang.

"Property markets usually go quiet in the first few days after the government releases new housing rules. But the sales will pick up soon after the home seekers have digested the news."

On Friday, the Hong Kong Monetary Authority announced that mortgage repayments of borrowers with multiple loans cannot exceed 40 per cent of their monthly income, down from 50 per cent.

Meanwhile, in the new-home market, Sun Hung Kai Properties cut its Century Gateway flat prices by at least 20 per cent. The average price of the second batch of 58 flats in Tuen Mun was HK$8,148 per square foot.

For example, a 923 sq ft flat released for sale yesterday was going for HK$6.92 million, 22.6 per cent less than the HK$9.51million price tag of a 982 sq ft flat on the same floor of the same block last week.

Sun Hung Kai Properties deputy managing director Victor Lui Ting denied that prices had been reduced and said the cost difference was because of the appliances in the flats. But property agents said only about 60 flats had sold since the project was launched on Wednesday because prices were too aggressive.

Henderson Land and New World Development yesterday also released a new batch of 100 flats for sale at Double Cove in Ma On Shan at an average price of HK$8,618 per square foot, after the developers sold about 250 flats on Friday.

Secretary for Transport and Housing Anthony Cheung Bing-leung yesterday warned that QE3 would increase the risk of a housing bubble in Hong Kong.

But he added: "The government is ready to take action to stabilise the market if prices fluctuate a lot."