Hong Kong Homes Showing Further Signs Of Decline As Negative Equity Rises, Says Qi-Homes.
Online, November 1, 2011 (Newswire.com) - The estimated number of mortgages in "negative equity"jumped to 1,653 at the end of the third quarter from 48 three months earlier, with the value of those loans rising to HK$4.1 billion ($528 million) from HK$58 million, the Hong Kong Monetary Authority said Oct. 28. An index tracking the city's developers fell today.
The aggregate value in negative equity rose to HK$4.148 billion at the end of September compared with HK$58 million at the end of June, representing 0.5 percent of the total amount of outstanding mortgage loans at the end of September.
The unsecured portion of these loans increased to around HK$165 million from HK$18 million in the third quarter
The threat of a global economic slowdown is intensifying "downward risks" in Hong Kong's home market and the government will monitor housing policies designed to curb prices, said Financial Secretary John Tsang
The government has in the past year raised minimum down- payment requirements on some home mortgage loans and increased land sales in an effort to curb soaring prices fueled by record low mortgage rates, a shortage of new apartment supply and an influx of buyers from other parts of China. Banks in Hong Kong have raised mortgage rates five times since March.
"There is a risk for Hong Kong property prices to fall by 6 to 7 percent over the next 12 months," said Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. "The most effective and flexible dose at the moment is the land sales policy.
Hong Kong's Chief Executive Donald Tsang promised to provide more affordable homes and signaled greater government intervention in narrowing social inequity in his Oct. 12 policy address, responding to a public outcry over the more-than 70 percent surge in home prices since early 2009. Home transactions fell for a ninth straight month in September, while prices declined 3 percent from June to August.
Now is the time for prospective buyers who have held back buying due to the high property prices in the past to start looking says Anthony Hindmarsh, Director of Qi-Homes Property Consultants Limited.
With More Landlords Faced with Negative Equity and Low Investor Sentiment Low, Deals can be found.
