Tighter rules on property purchases don’t seem to mean the dream of owning a home is getting any closer.
The new round of tighter mortgage rules from the Hong Kong Monetary Authority has done little so far to curb the city’s runaway home prices.
Property transactions did slow markedly over the weekend, but home prices actually spiked further.
Seven of the top 10 estates recorded zero transactions Saturday and Sunday.
However, the prices per square foot at H Cube in Tsuen Wan, Nam Fung Sun Chuen in Quarry Bay and Greenwood Garden in Sha Tin hit record highs in the deals booked during the weekend.
As things stand, most owners worry they won’t be able to afford another flat if they sell their existing one.
Supply in the market for existing homes has dried up further, Sammy Po Siu-ming, chief executive of Midland Realty’s residential department, said.
Tsuen Wan was once called the district for first-time homeowners. But obviously, this is no longer the case.
A 244 sq ft studio flat at H Cube changed hands for HK$4.15 million (US$535,000), meaning the buyer had to pay over HK$17,000 per sq ft.
Hong Kong’s de facto central bank unveiled Friday three new measures to curb the rise in home prices.
They include lowering the maximum loan-to-value ratio for residential properties for the buyer’s own use valued below HK$7 million by 10 percentage points to 60 percent.
The new measure may affect in particular young couples looking to buy a flat to start a family, as they tend to have less savings and have to rely on bank loans.
But executives at property agencies don’t think the government’s tough measures will hurt demand for housing at all, as developers are likely to provide potential buyers with second mortgages.
Instead of buying existing flats, homebuyers might therefore prefer to buy new ones, Apple Daily quoted Po and Willy Liu Wai-keung, chief executive of Ricacorp Properties, as saying.
Although Financial Secretary John Tsang Chun-wah said he will not hesitate to introduce other measures when necessary, Po said the transaction volume in the market for new homes will pick up soon.
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