Implemented in June 2011, the Hong Kong government launched additional cooling measures to curb rising property prices.
The most recent cooling measures enables buyers of units costing over HK$7 million but under HK$10 million to apply for a maximum loan-to-value (LTV) ratio of 60 percent, subject to a cap of HK$5 million. For properties costing HK$10 million or above, the maximum LTV ratio is 50 percent.
“The Hong Kong government’s attempts at cooling the residential market have shown mixed results over the last two months,” said Tim Murphy, Chief Executive Officer and Founder of IP Global.
“As mentioned in the IP Global Q3 2011 property barometer, sales at 10 of Hong Kong’s biggest residential developments fell 58 percent over one weekend in June,” he added.
According to the Centa-City Index CCI, the average prices of homes in Hong Kong decreased by 1.18 percent in June compared to a month earlier. In addition, the number of new home loans approved in Hong Kong dropped 16 percent to HK$26.6 billion in June from the previous month.
In July, however, residential prices grew 2.06 percent. Based on this data, “it is unclear that the cooling measures are working,” Tim noted.
He added, “The luxury market is likely to be affected by these measures with the wider market also likely to feel the affects.”
For more information, please visit IP Global’s website at http://www.ipglobal-ltd.com/. You may also email them at info@ipglobal-ltd.com.
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