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Hong Kong Reevaluating Stringent Property Restrictions

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Hong Kong has announced that they plan to cut back on their stringent restrictions within the residential real estate market due to declining prices. The government recently announced that if home prices continue their current decline, they will have no choice but to either loosen, or completely eliminate the restrictions currently set in place.

While the property restrictions had been effective in cooling prices so as to avoid the possibility of a real estate crash, the current threat of another global economic recession is causing housing prices to drop slightly faster and more than expected. Prices have not seen a substantial decline just yet, though Hong Kong officials are watching the market closely. If there is any indication that prices are falling faster than desired, the government will likely take action.

Home values in Hong Kong hit their lowest level in nearly a year according to the data reports from last month. Sales volume figures are also declining as a result of the restrictions. The current policies regarding the housing market were set into place last year after prices saw a seventy percent increase in a short period of time. In order to provide for a price correction, the Hong Kong government imposed new taxes on home sales, and limited access to mortgage loans.

Analysts believe that the Hong Kong housing market will see the average home price drop by fifteen percent in the next year. However, there is a chance that prices could drop by as much as thirty percent due to external factors affecting the market. If the decline in pricing is on the higher end of the spectrum, one can assume that the government will reduce their current restrictions to avoid any further sell-offs and pricing declines.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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