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HK issues home purchase ban
Published on: 2012-08-31
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altTen new measures, including one banning out-of-town buyers from buying property in some local housing projects were unveiled by the Hong Kong government on Thursday.
 
The new policies follow closely the release of a survey showing that over 90 percent of city residents say that home prices have become too high to afford.
 
The government is setting out plans for a significant increase in housing supply in the city, including the release of enough land to allow for 65,000 new residential units over the next three to four years, Chief Executive Leung Chun-ying said at a briefing on Thursday.
 
Units under My Home Purchase Plan (MHPP), which were originally intended solely for rental on a rent-to-purchase plan, will be sold to the public outright, instead, according to the government.
 
The original rent-to-purchase scheme was set aside, after it became apparent, that the plan, as originally conceived, could not address the imminent supply shortage in the current housing market. Thus, the first phase, of some 1,000 residential units, built in Tsing Yi by the Hong Kong Housing Society will be sold at a discount to eligible applicants whose household income falls below HK$40,000 per month commencing early next year, Leung said during the press conference.
 
The remaining 4,000 odd units built under the model will also be sold to the public at lower-than-market prices later. The Housing Society is currently studying a longer-term, sustainable scheme to help those earning under HK$40,000 to purchase their own homes in Hong Kong, Leung added.
 
However, a note written by Standard Chartered Bank on Thursday said the latest measures are unlikely to have immediate effect on the city's property prices, given that new homes that are able to be built in the near term remain scarce.
 
Vincent Cheung, national director of the valuation and advisory service of Cushman & Wakefield, said he is also worried that the expected intensive launch of new properties in 2014 and 2015 will just turn the "hot-spot" market into a cold one.
 
"The new measures will bring about even more new home supply at that time, which could be too many at once," said Cheung.
 
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