Affordable homes remain a distant dream despite curbs

The government's cooling measures for the overheated property market have been in force for 10 months. Yet prices remain high, making it harder for average people to buy their own home.

Research by property consultant Knight Frank shows prices have fallen only 3 per cent since the government introduced further housing measures in February. Many end-users are therefore still finding it difficult to buy affordable flats. The problem is likely to be exacerbated as mainland buyers and local investors return to the market.

Recent sales of new projects such as The Avenue in Wan Chai, The Cullinan and The Austin in Kowloon have attracted investors by offering them subsidises on stamp duties. This has lowered the investment cost for investors and mainlanders.

Agents estimated about 70 per cent of the buyers at The Avenue were investors, compared with about 30 per cent for The Visionary in Tung Chung.

As the sweeteners help boost sales, developers are expected to maintain similar benefits for upcoming projects.

Thomas Lam, head of research and consultancy for Greater China at Knight Frank, expects the proportion of mainland buyers in the primary market to increase to 10 per cent next year from 5 per cent now.

This is bad news for average homebuyers as they will have to prepare more of a down payment or find it difficult to obtain a mortgage loan. Even if they can get the loan, they still have to pay double stamp duties unless they are first-time buyers or have already sold their flats.