The story appears on

Page A16

October 24, 2009

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Consumer

HK acts on luxury property price rise

THE Hong Kong Monetary Authority moved yesterday to slow a surge in luxury property prices driven by rich buyers from China's mainland by limiting mortgages amid growing concern over a real estate bubble in the territory.

Last week, Hong Kong's Chief Executive Donald Tsang warned of a potential property bubble -- as one luxury flat in the city sold for a world record HK$71,280 (US$9,200) per square foot -- and said the government could release more land for sale.

The HKMA yesterday said it would cap the mortgage limit for luxury property at 60 percent, down from 70 percent, and limit mortgage loan values.

"It is very difficult to detect if a bubble is there," said Norman Chan, chief executive of the HKMA. "But what we're concerned about is, given the very sharp rise in prices in this top segment of the property market, the risk, or credit risk, to these mortgage loans to these properties has increased."

The HKMA said the 60-percent mortgage cap would apply to property valued at HK$20 million or more. For properties below that the 70-percent ratio will stay but the maximum loan amount will be capped at HK$12 million.

"We do not directly target price levels," Chan said.

Prices have surged by 26 percent this year, and by more in the luxury segment, where buyers from the mainland are snapping up homes. Many of them are entrepreneurs who are awash with cash and would not be deterred by the mortgage limit, analysts say. Chan admitted that but said there was still a portion of people needing mortgages.




 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend