Real Estate Information

The Hong Kong government took new steps Friday to rein in the city’s surging property market, in another example of how low interest rates in the U. S. Are rippling across the world.

Officials in Hong Kong, a special administrative county of China, were prompted to move as the local economy defied fears of a global economical slowdown. The government Friday raised its full-year economical-growth forecast after reporting gross domestic product grew rapidly and without delay than expected in the second quarter, despite its forecast that second-half export growth can slow.

Home prices have risen 13% so far this year, extending a 30% increase in 2009, raising worries with regards to the possibility abruptly plunge in property prices if economical conditions deteriorate.

On Friday, Hong Kong’s de facto central bank broadened a rule restricting home mortgages to 60% of the value of the property to utilise to real estate worth at least 12 million Hong Kong dollars (with regards to $1. 5 million). The rule antecedently applied to properties over HK$20 million. The move effectively extends limits on lending in the luxury property market to the wealthy city’s upper midtier market.

City officials also said they would put limitations on flipping sales contracts on new condominiums before the properties are delivered and make further and added city land available to developers.

“We want to put in perspective the preventive measures before a bubble forms,” said Hong Kong Financial Secretary John Tsang, who attributed the skyrocketing housing prices to the combined constituents of plentiful liquidity, historically low interest rates and limited property supply.

Much of Hong Kong’s current strains can be traced back to the U. S. Hong Kong maintains a peg with the U. S. Dollar, which means it essentially imports U. S. Interest-rate policy. The U. S. Federal Reserve on Tuesday indicated interest rates will be low for even longer than antecedently expected.
But different from the U. S. , Hong Kong is growing at a healthful clip. Second-quarter economical output grew a still strong 1. 4% from the former quarter, slower than the initial quarter’s sequential 2. 1% GDP rise. The healthful info prompted the government Friday to raise its full-year GDP growth forecast to 5% to 6% from 4% to 5%.
Hong Kong’s economy also continued to get a boost from mainland China, exceptionally from the speculative capital inflows known as hot money. Wealthy mainland residents make up a considerable chunk of consumers of Hong Kong property for investment intentions. Hong Kong has its own legal scheme and immigration controls, though its leaders are at long last chosen by Beijing.

The low U. S. Interest rates are having a huge effect in other constituents of the earth. The narrow divergence between U. S. Rates and Japan’s rock-bottom policy rate is one component in the rapid appreciation of the Japanese currency.
Frances Cheung, a senior strategist at Credit Agricole CIB, said her bank will raise its forecast for Hong Kong’s 2010 GDP growth to 5. 5% from 5. 2% in light of the second-quarter info. “I expect the yearly growth of GDP will moderate in the second half due to the fading base effect,” Ms. Cheung said. Hong Kong’s economy contracted 2. 8% last year, its initial full-year decline since 1998.

The new measures declared Friday follow a variety of measures the government has introduced this year to cool the city’s sizzling property market. In February, it raised the stamp obligation, or transaction levy, on sales of luxury property respected at more than HK$20 million to 4. 25% from 3. 75%.

It has also been putting more prime internet sites up for auction and has sold around 4,000 subsidized apartments to provide more affordable homes to middle and lower-income residents.
Mr. Tsang said Friday the government will auction three extra internet sites to developers on its latest application list in the remainder of this fiscal year, which ends March 31, regardless of whether any developers table an offer. These internet sites could accommodate with regards to 540 little, residential units, he said.

Mr. Tsang also said the government will also discern more rural internet sites for residential use and consider converting around 20 hectares, or with regards to 49 acres, of land in the first place earmarked for industrial or mercantile use into residential development internet sites.

By CHESTER YUNG And JOYCE LI

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Article Source: SuperPublisher.com