Cooling Measures... for Hot Small flats
New property cooling measures will see higher down payments for Hong Kong buyers
Friday, 27 February, 2015
Hong Kong Monetary Authority Chief Executive Norman Chan Tak-lam today announced measures to cool the city's property market after the prices reached what he called an all-time high.
Speaking at a press conference on Friday afternoon, Chan said that residential properties under the HK$7 million mortgage ratio would be capped at 60 per cent having previously been set at 70 per cent - meaning prospective buyers would need bigger down payments.
The HKMA also reduced the maximum debt servicing ratio - the monthly repayment of the borrower as a percentage of monthly income from 50 per cent to 40 per cent for borrowers who are buying a second residential property for self-use.
Furthermore, as part of measures, the maximum debt servicing ratio - the monthly repayment of the borrower as a percentage of monthly income - will be cut from 50 per cent to 40 per cent for all non self use properties.
Chan said: "The new measures may affect buying plans of first time buyers. But the authority always tries to strive to achieve a balance between the need to tighten mortgage financing to protect banking stability and the desire to minimise negative impact on genuine end-users, especially the first time buyers".
Further measures to cool down the property market would come “hard and fast” when they are needed, Financial Secretary John Tsang Chun-wah said earlier on Friday morning.
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