BLBG: Hong Kong Said to Plan New Property Curbs; Stocks Decline
Hong Kong’s government plans new measures to cool the property market that will be related to the stamp duty imposed on home sales, a person familiar with the situation said today. Developers’ shares declined.
The measures may be announced today, the person said, declining to be identified ahead of an official statement.
The Hang Seng Property Index was headed for its biggest drop in three months. The gauge, which tracks Hong Kong’s seven biggest developers including Sun Hung Kai Properties Ltd., fell as much as 2.5 percent, the most since Aug. 16, and traded 1.9 percent lower as of 11:56 a.m. in Hong Kong.
The city’s home prices have climbed about 50 percent since the start of last year, surpassing a 1997 peak that was followed by a six-year deflationary slump. Norman Chan, who heads the city’s central bank, has said the U.S. Federal Reserve’s expanded monetary stimulus may spur inflows of cash into Hong Kong, where a currency peg to the dollar prevents officials from raising interest rates to cool demand.
“Every time the government introduces new measures it will somehow slow down the rise in property prices,” said Wong Leung-sing, a research director at Centaline Property Agency Ltd., Hong Kong’s biggest privately held real-estate brokerage. “But after that slight pause, as long as interest rates stay low, prices will start going up again.”
The government will release measures to help cool rising home prices after the close of trading at 4 p.m., Dow Jones reported earlier, citing a person it didn’t identify. Terry Wong, a spokeswoman at the Financial Services and the Treasury Bureau, said she “can’t confirm” the Dow Jones report or comment if there will be a press conference today.
Sun Hung Kai, the world’s biggest developer by market value, lost 1.8 percent to HK$133.10, while Cheung Kong (Holdings) Ltd., controlled by the city’s richest man, Li Ka- shing, declined 2.7 percent to HK$120.50
Since August, the government has raised stamp duties on some home sales, increased down-payment ratios, stopped offering residency to foreigners who buy property in the city and increased land auctions to boost supply.
To contact the reporters on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net;
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
