Hong Kong’s newly approved mortgage loans fell 22 percent in September from August, the most since December 2008, after the government introduced measures to avert a property bubble.
The total value of newly approved loans declined to HK$31.6 billion (US$$4.1 billion), the Hong Kong Monetary Authority (HKMA) said yesterday on its Web site.
The amount of loans that had previously been approved and were drawn down in the month rose 2.4 percent in September from August to HK$33.9 billion, the HKMA said.
The government has since August raised downpayment ratios, stopped offering residency to foreigners who buy property in the city and increased land auctions to boost supply.
Sales of new homes doubled last month, and property prices have surged about 50 percent since the beginning of last year on record-low mortgage rates and an influx of wealthy mainland Chinese buyers.
“This is just a lagging indicator that reflects the measures in August,” said Nicole Wong, a property analyst at CLSA Ltd in Hong Kong.
“We’ve seen gains in both transaction price and volume in the home market in October, and we expect prices will rise faster than we expected next year,” she said.
New home sales volume more than doubled to 1,319 last month from September’s 524, Centaline Property Agency Ltd (中原地產), the territory’s biggest privately held real-estate broker, said in a release yesterday.
The Hang Seng Property Index, which tracks the territory’s seven-biggest developers, has gained 13 percent this year, compared with an 8 percent increase in the benchmark Hang Seng Index. The property index was up 2.7 percent yesterday, its biggest advance in almost two months.
HKMA chief executive officer Norman Chan (陳德霖) told lawmakers in Hong Kong yesterday that the home market was overheating and had posted “significant” price gains in recent months.
“Initial data in October seems to show that the home market is active again,” Chan said.
He cautioned that buyers should consider affordability because interest rates in Hong Kong couldn’t fall further. Hong Kong rates tend to follow those in the US because the local currency is pegged to the US dollar.
Hong Kong will maintain the currency peg as changing the peg system doesn’t mean pressure on inflation and the home market would be eased, Chan said.
A decline in used home sales at the weekend from a week earlier suggests property owners expect home prices to rise further, said Louis Chan Wing-kit, Centaline managing director for residential properties.
Used home sales in Hong Kong’s 10 biggest residential estates fell 24.3 percent this weekend from a week ago, Centaline said.
Existing home sales could rebound this month as the market becomes more active, after dropping 22 percent last month from September, according to Centaline’s statement.
“The government had said that they won’t interfere with the market whenever possible, and that has sent a signal to buyers that the government won’t adopt drastic measures on the home market,” Wong said.
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