HK to ease some property curbs if prices slump: Financial Secretary

In sharp contrast to Singapore’s move to further cool the private home market, Hong Kong will ease some of its property curbs if prices extend their decline amid Europe’s worsening credit crisis and a global economic slowdown.

Housing prices are “slowly coming down and … will continue for a bit and hopefully we will be able to achieve a soft landing … When the environment trends downwards, we will surely take countercyclical measures to deal with that,” said Hong Kong Financial secretary John Tsang.

Mr Tsang, who is on a visit to South Africa, said the timing of any loosening of the property measures was uncertain. “Timing is a judgment call that I will have to make nearer the time,” he said.

“The problems are rising in Europe and America, and many of those companies need some of the liquidity to assist them to get over the bump.

“We are mindful if the money were to leave in a disorderly way, this could disrupt the market,” he added.

Ms Eva Cheng, Secretary for Transport and Housing, said on Cable Television yesterday that Hong Kong may review special stamp duties imposed on some home sales in November last year, earlier than the scheduled 24 months, if needed.

Hong Kong home prices dropped to a six-month low in November and transactions slumped as the threat of a recession dented buyer confidence.

The government had imposed additional taxes last year and tightened access to mortgages four times since 2009 after prices jumped 70 per cent, underpinned by record-low interest rates and an influx of wealthy Chinese buyers.

“Hong Kong is almost confirmed to go into a downward price correction channel into 2012,” said Mr Lee Wee Liat, a property analyst at Samsung Securities in Hong Kong.

“When prices start to come down, the job of the government is no longer to keep being hawkish on tightening policy, rather it should think about cushioning the decline that could hurt the real economy.”

Mr Lee expects residential property prices will fall as much as 15 per cent by the end of next year.

But Sun Hung Kai Properties, Hong Kong’s largest developer, remains optimistic. Yesterday, it raised its 2012 fiscal year home sales target 14 per cent, saying the market will withstand a global economic slowdown.

The company aims to sell HK$32 billion (S$5.3 billion) worth of homes through the sale of 3,700 properties, revising an earlier target of HK$28 billion from 3,000 units, said Mr Eric Chow, an executive director at the developer’s agency arm.

Source : Today – 9 Dec 2011

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