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A man carrying a boy walk outside a property agency featuring posters of the latest high-rise apartment buildings. Photo: Reuters

Hong Kong property cooling measures cloud dreams of young homebuyers

Couples who've scrimped for years hit by government's latest cooling measures

Before tying the knot in 2013, Wong Man-lok had a plan to cut his spending to save enough to buy a small property within two years and start a family in a flat he owns.

Just when that goal seemed within reach, two years into his marriage, the Hong Kong Monetary Authority announced on Friday a new round of mortgage-tightening measures, delaying his plan for at least four years. The couple have lived with Wong's parents since they got married. They've travelled overseas just once since their honeymoon, avoid eating out, and Wong gave up on buying the PlayStation 4 he wanted so much - all in the hope of saving a deposit for a 400 sq ft flat.

But prices have soared, and the new measures mean they will need an initial down payment of 20 per cent, rather than 10 per cent, to secure a mortgage.

"The path to buying a property was long enough, and now it is even longer," said the 30-year-old assistant quantity surveyor.

Wong Man-lok and his wife Ho Wai-man face another four years of saving after the government's latest cooling measures. Photo: David Wong
Wong and his wife, Ho Wai-man, a 31-year-old designer, will now need to put down about HK$800,000 on a HK$4 million flat - if they can find a home for such a price in four years.

Wong noted that a 400 sq ft flat in Sunshine City, Ma On Shan, cost just HK$1.98 million in 2010. Now the price has more than doubled, a big challenge when they can save only HK$15,000 a month.

Adding fuel to the fire is the new policy, under which the maximum loan-to-value ratio under the mortgage insurance programme has been cut from 90 to 80 per cent - except for first-time buyers "with regular salary and stronger repayment ability".

In Wong's case, if he wants to buy a HK$4 million flat, he will probably need the full 20 per cent. Together with other expenses like stamp duty, the couple will have to fork out about HK$1 million up front.

"I have always wanted my own property so we can have our own world. It is also much better for when we have children," Wong said.

Commenting on Financial Secretary John Tsang Chun-wah's remarks that "if it is not affordable, then don't buy a property", Wong said the government was partly to blame for property prices being beyond many Hongkongers' reach.

Tsang's remarks have faced a backlash, with many online readers criticising him for not only failing to explain why property prices had jumped so much in recent years, but also placing the blame on buyers.

Registered nurse Tang Siu-sing, 26, is getting married next month. He and his fiancee make HK$65,000 a month. They rent a 400 sq ft flat for HK$8,500 a month and plan to buy a property once prices stabilise.

"My concern is that prices for small flats will go up under the new policy because many people will look for such flats," he said.

Ivan Chan, sales manager at Centaline Property Agency's branch at Coastal Skyline in Tung Chung, said some owners were willing to offer 2 to 3 per cent discounts after the announcement.

"Previously, owners were reluctant to discount even a single cent. Now they are offering more room for negotiation," he said.

Chan said a 485 sq ft flat at Coastal Skyline sold for HK$5.16 million yesterday, about 6 per cent lower than the original HK$5.5 million asking price.

Ringo Choi, sales director for Tsuen Wan, Tuen Mun and Yuen Long at Ricacorp Properties, said buyers had turned to new projects, where some developers provide top-up mortgages to help attract customers.

For example, developer Cheung Kong has teamed up with mortgage broker mReferral to provide up to 90 per cent of the flat's value for buyers at La Lumiere in Hung Hom.

"The tightening mortgage policy is to safeguard banking stability, but housing demand still exists. Prospective buyers will enter the market as long as they can afford to buy a property," said Cheung Kong executive director Justin Chiu Kwok-hung.

This article appeared in the South China Morning Post print edition as: Ownership dream turns flat again
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