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Tax hammers HK property shares
Source: Bloomberg News |
October 30, 2012, Tuesday
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Print Edition
Print Edition
HONG Kong property shares fell the most in seven months after the government imposed a tax on overseas home buyers to deter capital inflows and reduce the risk of a bubble in the world's most expensive housing market.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, fell 5.1 percent at the close in Hong Kong and Cheung Kong (Holdings) Ltd slumped 4.7 percent, while realtor Midland Holdings Ltd plunged 15 percent. The nine-member Hang Seng Property Index fell 3.7 percent, the most since March.
The property gauge had jumped 30 percent this year before yesterday, almost double the gain in the broader Hang Seng Index, as record-low interest rates and inflows spurred by US monetary easing drove home prices to a record.
Hong Kong Chief Executive Leung Chun-ying is implementing his third set of property curbs in two months, after tightening mortgage requirements and boosting the supply of land for developers as the boom triggered protests over a widening wealth gap.
''There're a lot of worried investors out there,'' said Adrian Ngan, a Hong Kong-based analyst at CITIC Securities International Co. ''Some worry that if these measures work, they'll hurt property sales. Some worry that if they don't work, it will prompt more measures from the government.''
Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang said at a press conference on Friday. The government also raised a resale tax on property by about 5 percentage points and extended the period during which it will apply to three years from two.
New World Development Co, the best performer in the property index this year, lost 6.4 percent.
Sun Hung Kai Properties Ltd, the world's biggest developer by market value, fell 5.1 percent at the close in Hong Kong and Cheung Kong (Holdings) Ltd slumped 4.7 percent, while realtor Midland Holdings Ltd plunged 15 percent. The nine-member Hang Seng Property Index fell 3.7 percent, the most since March.
The property gauge had jumped 30 percent this year before yesterday, almost double the gain in the broader Hang Seng Index, as record-low interest rates and inflows spurred by US monetary easing drove home prices to a record.
Hong Kong Chief Executive Leung Chun-ying is implementing his third set of property curbs in two months, after tightening mortgage requirements and boosting the supply of land for developers as the boom triggered protests over a widening wealth gap.
''There're a lot of worried investors out there,'' said Adrian Ngan, a Hong Kong-based analyst at CITIC Securities International Co. ''Some worry that if these measures work, they'll hurt property sales. Some worry that if they don't work, it will prompt more measures from the government.''
Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang said at a press conference on Friday. The government also raised a resale tax on property by about 5 percentage points and extended the period during which it will apply to three years from two.
New World Development Co, the best performer in the property index this year, lost 6.4 percent.
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