Hong Kong makes fresh bid to cool property prices no comments
Hong Kong imposed new measures on Friday in its newest bid to avert a property bubble, raising stamp duty on some transactions and tightening mortgage restrictions.
The International Monetary Fund on Thursday urged Hong Kong to draw up additional policies to take the heat out of the actual estate market, which has observed prices of luxury flats exceeding 1997 peaks by about 10 percent.
Overall, housing prices have risen around 50 percent because the beginning of last year as a result of brisk acquiring by mainland Chinese and low mortgage rates in Hong Kong, which tracks U.S. monetary policy mainly because its currency is pegged to the dollar.
Authorities in other Asian economies such as China, Thailand, Malaysia have announced similar moves to cool their property markets over the past month. [ID:nTOE6AI05T]
With effect from Saturday, buyers in Hong Kong will slap a stamp duty of 15 percent on housing transactions carried out within six months of the owner acquiring the property. A duty of 10 percent will apply on transactions between 6-12 months and 5 percent on those between one and two years.
The government will also lower the loan-to-value limit — the percentage of a property’s value that may be mortgaged — with immediate effect.
“Hong Kong’s newest moves are very lethal and will undoubtedly curb short-term speculative activities,” stated Marcos Chan, a head of study at Jones Lang LaSalle.
Monetary Authority Chief Executive Norman Chan stated properties valued at HK$12 million ($1.5 million) or above will have a loan-to-value (LTV) ceiling of 50 percent rather than the present 60 percent.
The ceiling for properties valued at HK$8-12 million is going to be cut to 60 percent from 70 percent.
“As a result of global monetary conditions, the local property market has grow to be increasingly exuberant of late. This is causing significantly concern in our community,” Monetary Secretary John Tsang told a news conference. “There can be a heightened risk of property bubbles forming.”