Hong Kong Financial Secretary John Tsang Chun-wah expects a “soft landing” for the real estate market, which the government has tried to curb with a series of measures, including higher stamp duties.
“Transactions have fallen and prices are starting to trend down slowly,” he said in an interview with Bloomberg. “There has not been a very violent reaction.”
Residential sales in the city-state have slowed, with prices falling for the first time in seven months. Although new mortgage applications have increased, latest data shows that new mortgage loans in August dropped by more than 25 percent.
Sales at new developments have also fallen, with only two sales among 10 residential projects recorded during the weekend.
“The residential market has basically frozen as a result of the curbs and the global downturn,” commented Alva To, Head of Consulting for North Asia at property brokerage firm DTZ. “Our surveyors are seeing almost a 60 percent drop in the number of valuation queries from banks compared with normal times.”
Meanwhile, developers have urged the government to monitor sales before proposed new measures regulating transactions are drafted.
“We hope that future legislation will not affect business,” noted Stewart Leung Chi-kin, Executive Committee Chairman of the Real Estate Developers Association.
The Hong Kong government has implemented measures to curb rising home prices, including accelerating land sales, raising the down-payment for some mortgages and imposing a tax for property resold within six months of acquisition.
Legco’s steering committee on the regulation of sales of first-hand residential properties by legislation made some recommendations to the Transport and Housing Bureau.
Lawmaker Lee Wing-tat, a steering committee member, said the proposed new measures would “extend the regulation period until after the completion of flats and use the saleable area to calculate the per-square-foot price.”
He added that a three-day cooling period for buyers is also recommended, “under which, if a buyer decided to cancel the deal he or she will have to forfeit the five percent deposit.”
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