“Transactions have fallen and prices are starting to trend down slowly,” Hong Kong Financial Secretary John Tsang said in an interview.
According to a Bloomberg report, Hong Kong Financial Secretary John Tsang predicted a “soft landing” for the real estate market and said the city will keep its currency peg to the U.S. dollar, blamed for helping drive home prices up about 70 percent.
“There have been ups and downs but the peg has come through for us,” Tsang said in an interview in Chicago yesterday. As for the property market, “transactions have fallen and prices are starting to trend down slowly,” he said.
The U.S. dollar’s 6.8 percent decline against the yuan in the past two years has inflated the cost of imports to Hong Kong and drawn property buyers from China. Home prices have tripled from their 2003 low, prompting a government crackdown on speculation that’s caused a three-month drop in new lending.
“The residential market has basically frozen as a result of the curbs and the global downturn,” said Alva To, head of consulting for North Asia at DTZ, a property broker. “Our surveyors are seeing almost a 60 percent drop in the number of valuation queries from banks compared with normal times.”
Hong Kong’s used home sales have slowed, with prices falling for the first time in seven months in July. That’s not a “very violent reaction,” Tsang said.
The government has imposed measures to address concerns about housing affordability, including raising the down-payment for some mortgages, accelerating land sales and imposing a tax on real estate resold within six months of purchase. Prices have jumped about 70 percent since the start of 2009. New loans approved fell 10.3 percent in August from a month ago.
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