Hong Kong Property Buyers Vanish

Hong Kong

Uncertainty over government policy has caused consternation among Hong Kong property buyers.

The special administration region’s chief executive Donald Tsang has made it clear that the government doesn’t was a “huge” property bubble, and is willing cool the market by any means available.

Reuters: Last month, Tsang said the government, which sells land by auction, could make more available for residential property development.

On Monday, he said tighter mortgage restrictions, introduced by the Hong Kong Monetary Authority, the city’s central bank, last month showed the government wanted to avoid a bubble.

The HKMA cut the mortgage limit on property worth HK$20 million ($2.6 million) or more to 60 per cent of the property’s value from 70 per cent. For properties below that, the 70 per cent ratio remains but the HKMA capped the maximum loan amount at HK$12 million.

Yet everyone knows that it’s hard to prick a bubble crashing asset prices, hence buyers are already pulling back from the market in droves in just one month.

The Standard: As of Thursday, the Land Registry recorded 8,518 secondary-market transactions for October, according to Midland Realty chief analyst Buggle Lau Ka-fai. The transactions were worth HK$25.77 billion, down 24.9 per cent from the first 29 days in September. Sales of homes, worth more than HK$20 million, were down 40.6 per cent to 85 deals.

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