Hong Kong’s government is ‘highly concerned’ about gains in home prices and will accelerate a series of auctions to make more property available, Financial Secretary John Tsang told lawmakers yesterday.
Mr Tsang said the city may also raise the stamp duty on homes sold for less than HK$20 million (S$3.5 million) and warned that 20-year-low mortgage rates won’t continue forever. The government in February said the stamp duty on homes selling for more than HK$20 million would be increased to 4.25 per cent from 3.75 per cent as of April 1.
‘I urge residents or investors to carefully assess the impact of climbing interest rates on mortgage payments when they consider buying apartments,’ Mr Tsang said.
Buying by mainland Chinese and low borrowing costs drove a 29 per cent surge in Hong Kong home prices last year, prompting the government to raise downpayments on luxury homes in October and increase taxes on those purchases this month. Mr Tsang pledged to reduce the risk of a property market bubble and keep housing affordable for low-income families.
‘I understand the worries of residents about rapidly rising home prices, and I agree that we need to reduce the bubble risk in the property market to avoid any impact on the financial system’s stability and the recovery in the real economy,’ Mr Tsang said.
Two residential sites, one in Kowloon and the other on Hong Kong Island, will be auctioned off in June and July, bringing to four the total number of sites the government is selling in the coming three months, Mr Tsang said.
Low interest rates won’t be sustained for long as governments around the world wind back stimulus measures, he said.
Source: Business Times, 22 Apr 2010