HONG KONG: Shares in Hong Kong property developers were mixed in Monday morning trading after authorities had another crack at cooling the Asian financial hub’s red-hot property market. The Hong Kong Monetary Authority announced that second-home buyers will have to stump up more for deposits, as the city’s de-facto central bank lowered loan-to-value ratios by 10 percentage points. Banks will also have to put aside more capital for mortgage lending. In some cases second-time buyers will now need to cough up deposits of 50% or 60%. Shares in the city’s biggest developer, Sun Hung Kai Properties (16.HK), slipped 0.5%, while peer Cheung Kong Property (1113.HK) was up 0.8%.
Credit Suisse, which is Underweight Hong Kong developers, said it expected a 10% fall in property transactions in the city as a result of the latest tightening measures. Prices in the semi-autonomous Chinese territory have been rallying more-or-less uninterrupted for nearly 15 years. Since the Global Financial Crisis they’re up around 200%. In the last month alone, prices on Hong Kong Island have risen nearly 4% on average. Valuations have soared on the back of an influx of mainland Chinese capital into the city, whose currency is pegged to the U.S. dollar, as well as a general shortage in housing for the local population. The government has tried to cool the market several times with limited success. As part of recently-introduced measures foreign, non-first-time buyers now have to pay 30% tax when buying a property.
