Hong Kong developers lobby government to end cooling measures, protect homeowners from negative equity amid price slump
- The Real Estate Developers Association is lobbying the government to lift stamp duties imposed as a cooling measure when the market was much hotter
- The number of homes valued below their mortgage loan amount remains small, and analysts do not expect a massive increase soon
Hong Kong property developers and agents are lobbying the government to scrap legacy stamp duties to avoid pushing homeowners into negative equity amid slumping home prices, a clarion call that is being dismissed by analysts.
The city’s 1.4 million private property owners could face negative equity – when a home loan exceeds the market value of the property – if home prices fall further, said Stewart Leung, executive committee chairman of the Real Estate Developers Association (Reda), which represents the city’s biggest developers.
If cooling measures are not relaxed, and prices keep declining, banks will ask mortgage holders to repay part of their loans, Leung, who is also chairman of Wheelock Properties, told the Post in a call on Tuesday.
“It will mess up the market,” he said. “Even if home prices do not rise, do not let them fall.”
The government has implemented cooling measures for more than a decade to reduce short-term speculation and lessen non-local and investment demand.