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20-11-2010, 11:42 AM
Could Singapore employ similar measures soon?
Business Times - 20 Nov 2010
HK steps up fight to cool property prices
Homes sold within 6 months of purchase will incur 15% stamp duty from today.
(Hong Kong)
HONG Kong imposed additional taxes and raised downpayments on residential properties, stepping up a battle against surging prices after the International Monetary Fund (IMF) warned that asset inflation may derail the city's economy.
Homes sold within six months of purchase will incur a 15 per cent stamp duty from today, Financial Secretary John Tsang said in a briefing yesterday. Down payments for homes costing HK$12 million (S$2 million) or more will rise to 50 per cent, from 40 per cent. A stock gauge of developers in Hong Kong fell for the eighth day in nine ahead of the announcements.
'The measures show the government is serious about curbing speculation, and that would impact on market sentiment, leading to a fall in home sales volume,' said David Ng, a Hong Kong-based property analyst at Royal Bank of Scotland plc. 'Home prices won't see a decline immediately as speculators could still keep their stocks in the low interest rate environment.'
Governments from South Korea to Brazil are acting to stem fund inflows into their higher- yielding markets after the US Federal Reserve's expanded monetary stimulus. Hong Kong is resorting to increased taxes and tighter lending to curb home prices that have risen more than 50 per cent since the beginning of 2009 because the island's currency peg to the US dollar prevents the city's de facto central bank from raising interest rates.
'The unusual surge in flat prices has attracted speculators - this, coupled with quantitative easing measures, has distorted the market expectation regarding inflation and asset prices,' Mr Tsang said. 'The government is resolute in maintaining economic stability and curbing any threat to people's livelihoods.'
The Hang Seng Property Index, which tracks the city's seven-biggest builders, fell 1.3 per cent at the 4pm local time close to the lowest since Oct 29. It has declined 7.6 per cent since this year's peak on Nov 8. It ended the week 4.1 per cent lower, its biggest weekly drop since the five days ended May 7.
Properties resold within 6-12 months will incur a 10 per cent stamp duty, while those resold from 12-24 months will be charged 5 per cent, Mr Tsang said yesterday. The stamp duty will be split between buyers and sellers, he said.
Down payments for homes costing HK$8-12 million will be increased to 40 per cent from 30 per cent, Hong Kong Monetary Authority chief executive Norman Chan said at a separate briefing yesterday. Mr Chan has said that the Fed's quantitative easing may spur inflows of cash into Hong Kong.
The maximum loan to value for all non-owner occupied residential properties and those held by companies will be lowered to 50 per cent, Mr Chan said.
The government will adopt more measures to make sure that the market is stable, Mr Tsang said.
The additional stamp duty 'is quite substantial, and is a way to deter speculation', said Benedict Ma, Hong Kong-based associate director of research at CB Richard Ellis Group Inc, the world's biggest real estate services firm. 'Investors, especially those in the luxury market, will have to reassess whether this is really the right time to get into the market.'
The IMF said in a report on Thursday that Hong Kong's accelerating asset inflation risks causing a bust that leads to deflation and an extended economic 'downturn', and urged further measures to rein in prices. The city has in the past year raised down payment ratios and boosted land supply to curb home prices, which have surpassed a 1997 peak on the back of record low mortgage rates and an influx of mainland Chinese buyers.
In April, Hong Kong raised the tax on homes selling for more than HK$20 million to 4.25 per cent from 3.75 per cent. -- Bloomberg
Business Times - 20 Nov 2010
HK steps up fight to cool property prices
Homes sold within 6 months of purchase will incur 15% stamp duty from today.
(Hong Kong)
HONG Kong imposed additional taxes and raised downpayments on residential properties, stepping up a battle against surging prices after the International Monetary Fund (IMF) warned that asset inflation may derail the city's economy.
Homes sold within six months of purchase will incur a 15 per cent stamp duty from today, Financial Secretary John Tsang said in a briefing yesterday. Down payments for homes costing HK$12 million (S$2 million) or more will rise to 50 per cent, from 40 per cent. A stock gauge of developers in Hong Kong fell for the eighth day in nine ahead of the announcements.
'The measures show the government is serious about curbing speculation, and that would impact on market sentiment, leading to a fall in home sales volume,' said David Ng, a Hong Kong-based property analyst at Royal Bank of Scotland plc. 'Home prices won't see a decline immediately as speculators could still keep their stocks in the low interest rate environment.'
Governments from South Korea to Brazil are acting to stem fund inflows into their higher- yielding markets after the US Federal Reserve's expanded monetary stimulus. Hong Kong is resorting to increased taxes and tighter lending to curb home prices that have risen more than 50 per cent since the beginning of 2009 because the island's currency peg to the US dollar prevents the city's de facto central bank from raising interest rates.
'The unusual surge in flat prices has attracted speculators - this, coupled with quantitative easing measures, has distorted the market expectation regarding inflation and asset prices,' Mr Tsang said. 'The government is resolute in maintaining economic stability and curbing any threat to people's livelihoods.'
The Hang Seng Property Index, which tracks the city's seven-biggest builders, fell 1.3 per cent at the 4pm local time close to the lowest since Oct 29. It has declined 7.6 per cent since this year's peak on Nov 8. It ended the week 4.1 per cent lower, its biggest weekly drop since the five days ended May 7.
Properties resold within 6-12 months will incur a 10 per cent stamp duty, while those resold from 12-24 months will be charged 5 per cent, Mr Tsang said yesterday. The stamp duty will be split between buyers and sellers, he said.
Down payments for homes costing HK$8-12 million will be increased to 40 per cent from 30 per cent, Hong Kong Monetary Authority chief executive Norman Chan said at a separate briefing yesterday. Mr Chan has said that the Fed's quantitative easing may spur inflows of cash into Hong Kong.
The maximum loan to value for all non-owner occupied residential properties and those held by companies will be lowered to 50 per cent, Mr Chan said.
The government will adopt more measures to make sure that the market is stable, Mr Tsang said.
The additional stamp duty 'is quite substantial, and is a way to deter speculation', said Benedict Ma, Hong Kong-based associate director of research at CB Richard Ellis Group Inc, the world's biggest real estate services firm. 'Investors, especially those in the luxury market, will have to reassess whether this is really the right time to get into the market.'
The IMF said in a report on Thursday that Hong Kong's accelerating asset inflation risks causing a bust that leads to deflation and an extended economic 'downturn', and urged further measures to rein in prices. The city has in the past year raised down payment ratios and boosted land supply to curb home prices, which have surpassed a 1997 peak on the back of record low mortgage rates and an influx of mainland Chinese buyers.
In April, Hong Kong raised the tax on homes selling for more than HK$20 million to 4.25 per cent from 3.75 per cent. -- Bloomberg
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