Mon, Nov 22, 2010 - Page 12 News List

HK weekend sales of homes slumps on property curbs

Bloomberg

Weekend sales of used homes in some of Hong Kong’s biggest private housing estates fell 83 percent from the previous week as the government imposed additional taxes and raised down payments to curb surging prices.

The number of transactions fell to 10 on Saturday and yesterday at projects including Tai Koo Shing (太古城) in the Island East district and Mei Foo Sun Chuen (美孚新村) in Kowloon, Centaline Property Agency Ltd (中原地產), the city’s biggest privately held real estate broker, said in a statement yesterday. There were 59 deals the previous weekend, the broker said last week.

Hong Kong joined governments from South Korea to Brazil in seeking to stem fund inflows into their higher--yielding markets after the US Federal Reserve’s expanded monetary stimulus. Authorities are acting after home prices rose more than 50 percent since the beginning of last year. Hong Kong’s currency peg to the US dollar prevents its de-facto central bank from raising interest rates.

“Speculative activity” fell after the government announcements and few sellers slashed their prices, resulting in the contraction in transactions, Louis Chan (陳永傑), Centaline’s managing director for residential properties, said in the statement.

The Hang Seng Property Index, which tracks the territory’s seven biggest developers, fell 1.3 percent on Friday to the lowest since Oct. 29. The measure has declined 7.6 percent since this year’s peak on Nov. 8. It ended the week 4.1 percent lower, its biggest weekly drop since the five days ended May 7.

Homes sold within six months of purchase will incur a 15 percent stamp duty from Saturday, Hong Kong Financial Secretary John Tsang (曾俊華) said on Friday. Down payments for homes costing HK$12 million (US$1.5 million) or more will rise to 50 percent, from 40 percent.

Down payments for homes costing between HK$8 million and HK$12 million will be increased to 40 percent from 30 percent, Hong Kong Monetary Authority Chief Executive Norman Chan (陳德霖) said on Friday. The maximum loan to value for non-owner occupied residential properties will be lowered to 50 percent, Chan said.

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