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Thursday, February 16, 2017, 19:36

'High' property prices seen moving upwards

By Lin Wenjie

'High' property prices seen moving upwards
A couple walks amid residential tower blocks in Hong Kong on July 9, 2016. (Aaron Tam/AFP)

More than half the people in Hong Kong expect the city’s home prices to rise in the first half of this year despite cooling measures taken by the government in November last year in a bid to tame the overheated property market , according to the Hong Kong Property Market Perspective Survey released by online property platform

The survey, released on Thursday, found 52 percent of respondents believed property prices would continue to rise, and most of them anticipated an increase of more than 5 percent in the first half, hugely outnumbering the 25 percent of respondents who saw property prices dropping.

Nearly 90 percent of respondents saw Hong Kong’s housing market as overpriced and 66 percent of interviewees believed the cooling measures were not sufficient to cool property prices. Nearly 80 percent of respondents strongly believed the main reasons for the overpriced property market were a land shortage, population increase and hot money from the Chinese mainland .

The survey also showed that most respondents were not satisfied with the housing policy last year, and hoped this year’s new government would stabilize the housing market with fresh measures. Most people agreed possible measures included developing brownfield sites for residential use and amendment of town planning policies to allow industrial buildings and warehouses to be redeveloped as residential units. However, more than half of respondents opposed the development of country-park land.

After the government increased stamp duty, buyers have piled into new homes, or the primary market

King Yip, managing director of Hong Kong Mortgage Consultants

The survey interviewed 2,872 people between 20 and 60 years old. Most were professionals and white-collar employees.

King Yip, managing director of Hong Kong Mortgage Consultants, said property transaction volumes had fallen because of the cooling measures but home prices were still strong, an “unhealthy” market state.

"After the government increased stamp duty, buyers have piled into new homes, or the primary market, where developers can offer up to 90 percent mortgages. This is very unhealthy. If the mortgage rates increase after the United States Federal Reserve [raises] interest rates and the buyers cannot afford the mortgage, it will be a bomb for the overall market,” Yip said.

He suggested the government cut the down-payment for home buyers and reduce the Stamp Duty from 15 percent to 8 percent to activate the house swap chain in the secondary market. This would guide buyers into the secondary market. Many owners who already possessed a property had become unable to swap it for a bigger home.

During a Legislative Council meeting on Thursday, Transport and Housing Minister Anthony Cheung Bing-leung admitted that property bubble risks still existed, so several rounds of demand-side management measures were needed to combat speculation and curb external demand. The government would continue to give the home ownership needs of Hong Kong’s permanent residents priority and stabilize the residential property market.

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