Opinion | The good, bad and ugly of a fistful of property intervention
The usual suspects and some unexpected targets have been caught by official curbs on the market
On Friday I got a text message from a friend saying she had put her industrial unit up for sale weeks ago but still hadn't found a buyer.
Could this be because the investment tide has turned, and there are now more sellers in the market than buyers? Or is there something else at work?
She bought the property in Kwai Chung in September - a month before the start of another round of property cooling measures by the government. Her plan at the time was to hold the unit as a long-term investment, a move based on the prevailing yield of more than 4 per cent, low interest rates, and strong liquidity.
Six months on and interest rates remain low, liquidity remains strong, and investment yields remain relatively high. The chief differences between now and then are forebodings of a possible rising trend in interest rates (some banks moved their mortgage lending rates 25 basis points higher last week); and the apparent readiness of the government to intervene more aggressively to curb speculation in the property market.
Following on its October intervention, the government last month unexpectedly doubled stamp duty on purchases of residential as well as non-residential properties valued at more than HK$2 million.
Investors in non-residential properties were shocked by the inclusion of the sector in the clampdown on speculation and rising prices. They had thought the sector to be more or less immune from policies aimed at the soaring residential market, only to wake up to the realisation that their investments were also exposed to policy risk.
That is something residential property owners learned to live with a long time ago.