Mon, Jan 17, 2011 - Page 11 News List

Weekend home sales in HK rise for third week

BLOWING BUBBLES:Hong Kong policy makers still see risks from property-price bubbles as US monetary easing causes more capital to flow into the territory

Bloomberg

Weekend transactions of used apartments in some of Hong Kong’s biggest private housing projects rose as much as 11 percent as the prospect of tighter mortgage--lending rules spurred purchases.

The number of deals at projects including Tai Koo Shing and Mei Foo Sun Chuen rose for a third consecutive week, climbing from 73 the previous weekend to 81 this weekend, Midland Holdings Ltd (美聯物業), the territory’s biggest realtor by market value, said in an e-mailed statement yesterday. Centaline Property Agency Ltd (中原地產), Hong Kong’s largest closely held realtor, reported 102 sales for an increase of 9.7 percent from last week.

Total home sales in Hong Kong fell to a seven-month low last month after the government on Nov. 19 intensified a yearlong battle to curb surging prices with additional taxes and policies.

The government on Jan. 5 announced that it is considering a plan to allow banks to widen the scope of the credit checks they conduct on mortgage applicants.

“Some buyers or investors are worried that once this comes into effect it may be harder for them to borrow from banks,” Centaline research director Wong Leung-sing (黃良昇) said. “They want to complete the deals before it happens.”

The government will seek public feedback until Feb. 8 on the proposed expansion of the data-sharing system to include positive and negative credit history for homes and non-residential properties, Allan Chiang, the Privacy Commissioner for Personal Data, said in Hong Kong yesterday.

“We welcome the consultation,” David Lam, acting chairman of the Hong Kong Association of Banks and deputy chief executive of Bank of China (Hong Kong) Ltd., said at the press briefing.

Under the current system, banks can share only negative data for customers’ housing mortgages, while both positive and negative data is available for unsecured debt such as credit card borrowings.

“The expansion will allow banks to assess home buyers’ credit status more comprehensively and avoid over-leveraging by some clients, helping curb speculation in the property market,” Lam said.

Hong Kong home values have surged about 57 percent since the beginning of 2009. The Centa-City Leading Index, a home- price tracker, rose 1.9 percent in the week ending Jan. 9, according to Centaline.

Policymakers, including Norman Chan (陳德霖), head of the territory’s de-facto central bank, said they see risks from property-price bubbles as US monetary easing contributes to capital inflows. Hong Kong’s currency peg to the US dollar prevents officials from raising interest rates to cool demand.

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