Hong Kong’s ‘spicy measures’ are here to stay, even as property prices slump, say government officials
- Financial Services and Treasury Secretary says it is too early to scrap curbs
- Home prices have fallen since August, snapping a 28-month boom
Any hope for first-time buyers of paying less initial deposit to buy a home was once again quashed as a senior government official reiterated on Monday that Hong Kong’s mortgage policy remains unchanged.
The government considered it too soon to lift the curbs, or “spicy measures” as they are commonly known, imposed over the past few years to cool the city’s overheated property market, said Secretary for Financial Services and the Treasury James Lau.
Lau said the measures – including the higher stamp duty on certain transactions and high amount of the initial down payment, which represents 30 to 40 per cent of the property – were necessary to maintain a stable financial market in a red hot property market.
“While we have seen the property prices decreasing recently, it is still too early to remove these spicy measures. The government has no timetable on when they would be removed,” Lau said on the sidelines of the government-organised Asian Financial Forum.
He said the government would keep close tabs of prices and supply, as well as related issues before it made any changes to the current policy.
While we have seen the property prices decreasing recently, it is still too early to remove these spicy measures
Lau’s comments aligned with remarks from the Financial Secretary Paul Chan Mo-po, who said in a Bloomberg TV interview on Monday that the government had no plans to loosen controls on mortgages and the property sector.
“We are glad to see that the property market is correcting orderly,” Chan was quoted as saying.
He also welcomed the decline in home prices and said “there is no need for us to do anything to sustain the market”. Prices have fallen since August, snapping a 28-month boom.
Chan’s remarks also clarified his previous comments from a blog post in early January where he said “it was not impossible to explore solutions” to help homebuyers.
The post triggered immediate market speculation of a shift in mortgage policy, which was refuted a day later by Chief Executive Carrie Lam Cheng Yuet-ngor’s clarification that there was no immediate change.
Lam had said the cost of property in the city had seen a significant increase since she took office in July 2017, even taking into account the 7.2 per cent drop between August and November last year.
