HONGKONG and Shanghai Bank's new 60 per cent mortgage lending ceiling on larger home loans is likely to do little more than take the sting out of the runaway luxury residential sector.
It may manage to slow rocketing prices to a degree, but is very unlikely to bring prices down.
The vast majority of buyers of homes worth more than $5 million are wealthy enough not to have to worry about such things as mortgage lending ratios.
About 50 per cent of buyers at the so-called luxury end of the market now are speculators while most genuine end-users tend to be trading up to larger units and have already made sizeable profits on their previous homes.
Mortgage lending criteria have a far greater impact on first-time buyers who are almost exclusively found at the cheaper end of the housing scale.
The impact on the luxury market is expected to be more psychological than anything.
Some potential buyers may now think twice before committing such a large amount as down-payment.