Sales at 10 of Hong Kong’s largest residential developments fell 58% this weekend after the Hong Kong Monetary Authority raised minimum down payments and deposits for foreign buyers on Friday, reports Shanghai Daily. Buyers of homes costing HK$6 million (US$770,000) are seeing increased down payments, foreign buyers must put an addition 10% down on their purchase.
The new regulations are an attempt to reign in property prices that have gone up by 70% since 2009, even though the market was already showing signs of weakening after banks raised mortgage interest rates this year. According to Centaline Property Agency Ltd, home sale transactions fell for the 5th month strait in May, but prices still rose 1.3% during the week that ended on June 5th. This is the fourth time the government intervened to cool the market.
The measures “show the government’s determination to hold prices at their current level,” said Lee Wee Liat, a property analyst at Samsung Securities Ltd in Hong Kong. “It may signal they will take more significant steps and that’s to limit the number of units foreigners or mainlanders can buy in the city.”
Centaline projects that sales will slow by 10 to 20% overall in the coming weeks.
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