New | Hong Kong house prices to see pullback, but no sharp correction, analysts say

Hong Kong's housing sector is seeing a slow pullback due to an unclear outlook, given the possibility of further tightening measures from the government. But a sharp correction is unlikely, agents and analysts say.

Some homeowners have started cutting asking prices and developers are expected to trigger a mild correction to entice buyers after the Hong Kong Monetary Authority imposed its seventh round of tighter lending policies on Friday.

Smith Tang, a sales manager at Centaline Property Agency's Kwai Tsing branch, said a flat owner sold a unit at the Apex in Kwai Chung at the weekend for HK$4.86 million after cutting the price by HK$140,000.

"Overall sentiment is very quiet," Tang said.

Agents said the impact of the measures would be better reflected in the coming weeks.

The HKMA announced three measures on Friday, including capping the loan-value ratio for residential properties less than HK$7 million at 60 per cent, down from a range of 60 to 70 per cent, which will raise buyers' required down payments.

Homebuyers will find it more difficult to borrow as the measures, which took immediate effect, also lowered the maximum debt-service ratio, the monthly repayments of the borrower as a percentage of monthly income, from 50 per cent to 40 per cent.