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| No.8 August, 2010 |
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More property controls announced |
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 New measures to reduce risks in Hong Kong dynamic property sector will see a boost to land supply and action against speculators.
Hong Kong’s Financial Secretary John Tsang said the move was aimed at heading off the potential for a property bubble driven by continuing low interest rates.
Mr Tsang said the mortgage repayment to household income ratio rose to 41.5% in the second quarter.
"Although this is still lower than the 1989-2008 20-year average of 53%, there is increased risk of a property bubble forming because interest rates are expected to continue to be very low for some time to come," he said.
The Hong Kong Government will earmark three more plots of land for release to the market via auctions or tenders, with two sites set for disposal in September.
A Planning Department review has identified 20 hectares of land currently earmarked for industrial and business use that can be turned into residential use. The department is also considering changing the use of selected Government, institution and community sites for residential development.
Meanwhile, development of a site near Hong Kong's old airport at Kai Tak site will provide 16,000 residential flats, with the land for 4,000 being made available by 2015.
The Lands Department will disallow confirmor transactions of first-hand uncompleted flats which are granted pre-sale consent by the department with immediate effect. Purchasers of those flats will not be allowed to re-sell, sub-sell or transfer the benefits of the agreements for sale and purchase before the transaction's completion.
The department will also require buyers of those flats to forfeit 10%, instead of the current 5%, of the total purchase price if they cancel transactions.
"We earlier introduced a series of measures to enhance the transparency of property information and transactions. We will monitor the implementation of these measures closely. We do not rule out the possibility of legislating if these measures do not prove to be effective," Mr Tsang said.
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