The Hong Kong Monetary Authority will starting unwinding its property loan curbs once it knows for sure that the market is falling, the Hong Kong Economic Journal reported Tuesday, citing authority chief Norman Chan Tak-lam.
Marking his first five years at the de facto central bank’s helm, Chan said in his blog on the authority’s website that while the high leverage growth in the property mortgage market has been more or less reined in since counter-cyclical regulations were put in place in 2009, the market remains uncertain and it’s not clear if it is in a downturn.
Analysts echoed Chan’s general view, saying a downturn should involve a 20-plus percent decline in property prices and more than two years of price falls amid rising transaction volumes and mortgage costs.
The authority has embarked on six rounds of property curbs since 2009 to ensure stability in the financial market and the banking system, and to strengthen the ability of homeowners to cope in a downturn.
He said counter-cyclical measures are not complicated concepts, “although it’s quite another matter when put into practice”. “Taking action to cool the market when everyone is having fun has been likened to spoiling the party by taking away the punch bowl, or, as a local saying goes, ‘frustrating one’s plans to get rich’,” he said.
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