Hong Kong failed to cool property market

Hong Kong Monetary Authority’s tighter lending rules have not deterred hundreds from snapping up units in projects such as Victoria Skye and The Ocean Pride.

The launch of two residential projects in Hong Kong – Victoria Skye and The Ocean Pride – saw thousands of prospective buyers lining up, indicating that the government failed in its effort to cool the property market, reported Bloomberg.

Notably, the Hong Kong Monetary Authority has rolled out tighter lending rules, which includes restricting levels of lending to property developers, in its bid to limit financial risk and cool the property market.

“Successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier,” said an editorial at The Standard newspaper. “The result is a sea of madness.”

In fact, developers reportedly sold 8,616 homes during the first five months of 2017, or higher than those sold in any first half since the introduction of new purchasing rules in 2013.

With the levels of demand reminiscent of 20 years ago – prior to the property bust, HKMA Chief Executive Norman Chan is concerned that people with limited financial resources would buy property on the belief that prices would continue to increase.

Meanwhile, K&K Property will reportedly release another 200 Victoria Skye units, after 306 flats were snapped up by buyers on Saturday (27 May). Cheung Kong, on the other hand, will reportedly put up an additional 346 The Ocean Pride units for sale, after it sold 496 flats on Friday (26 May).

The two developers reportedly plan to raise the prices for the additional units by around two percent.

 

This article was edited by Denise Djong.