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No promises 03/02/15

Both SARs made statements on housing policy on Friday. Hong Kong announced further cooling measures. While Macau CE Chui Sai On adopted a non-committal approach.

Macau Chief Executive Fernando Chui Sai On said he was not making any promise to change the existing regulatory measures for the city’s home prices, although neighbouring Hong Kong has announced fresh moves aimed at cooling the property market. Both statements were made on Friday.
The Chief Executive was talking to media at an event when asked whether the administration would implement any further property curbs against the backdrop of high property prices here.

Mr. Chui stressed that there were currently no “conditions” to alter or cease the existing home price regulatory measures, which was a set of policy initiatives enacted in October 2012.

At the time, the local government tightened the loan-to-value ratios for homebuyers, while extending the special stamp duty from homes to shops, offices and car parking lots.

Both the city’s currency and that of Hong Kong are pegged to the US dollar and an increase in US interest rates would cause domestic rates to rise as well, increasing mortgage repayments for homeowners.

On Friday, Hong Kong announced fresh measures aimed at cooling the property market and protecting financial stability, a move that comes ahead of an expected US interest rate rise this year.

The Hong Kong Monetary Authority (HKMA) cut the amount of money home buyers can borrow to 60 per cent of the property’s value, from 70 per cent for homes priced below HK$7 million (US$902,818), a step aimed at curbing speculative demand for smaller apartments. The debt-servicing ratio for second-home buyers would be lowered to 40 per cent for second-home buyers from 50 per cent. All measures were effective immediately.

Home prices in the former British colony have surged about 130 per cent since 2008 due to low interest rates, a supply shortage and ample liquidity.
In Macau, the average home price surge was even more aggressive: the local home price has risen 328 per cent since 2008 to MOP99,795 per square metre last year.

Speaking to media on Friday, Mr. Chui pledged that the government would analyse the overall economic conditions here and engage in an active search for land banks to build new homes.

The Chief Executive will meet the Governor of the People’s Bank of China Zhou Xiaochuan during his visit to Beijing from March 4 to March 7, when the concurrent sessions of the National People’s Congress and Chinese People’s Political Consultative Conference are held during the month.
S.L. with Reuters

Source http://macaubusinessdaily.com/Property/No-promises

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