Concerns over demand & supply of HDB flats to be raised in Parliament
By Lin Jiamei, 938LIVE | Posted: 20 November 2009 1607 hrs
SINGAPORE: Concerns over the property market will be one of the main topics to be discussed in Parliament next week.
MP for Aljunied GRC Cynthia Phua will be asking the Minister for National Development about the projected supply and demand of HDB flats over the next five years while MP for Marine Parade GRC Muhammad Faishal wants to know about the waiting time for new couples applying for HDB flats.
MPs are also planning to ask the Minister of Foreign Affairs for his assessment of the recently concluded APEC meetings.
And there are three questions on Shell's S$1-per-litre fuel promotion on October 24 and the traffic jams that resulted.
Concerns over new immigrants will also be discussed.
Opposition MP Chiam See Tong will be asking the Deputy Prime Minister on the number of foreigners who have successfully applied for permanent residency in Singapore.
Parliament is also expected to introduce changes to the Moneylenders Act to enhance penalties for loansharks.
Parliament will sit at 1.30pm on Monday. - 938LIVE/vm
Saturday, November 21, 2009
TODAY Online : Singing the bubble blues
Singing the bubble blues
Is the market really cooling off? Some don't think so and expect more measures if exuberance persists
05:55 AM Nov 21, 2009
by Tan Hui Leng
SINGAPORE - Sales of private homes have dipped to their second lowest level this year in October according to data released by the Urban Redevelopment Authority (URA) this week.
While market observers believe that this downward trend was the result of the recent anti-speculative measures introduced by the Government, some analysts are sceptical that the market has started to cool.
According to statistics, sales of new properties have been tapering off in the last three months from 1,805 in August, to 1,143 in September, and 811 in October.
Still, this is after a record of 2,772 units sold in July and way above the year's lowest level in January when only 108 units were sold.
Analysts reckoned that sentiment in the property market had simmered down in August and September as it coincided with the Hungry Ghost Festival, a traditionally quiet period.
Sales failed to pick up in September after the Government announced anti-speculative measures which included the removal of the Interest Absorption Scheme.
However, Chesterton Suntec International's research and consultancy head Colin Tan said that the total of 811 units sold in October was still above average when compared to some 600 homes sold a month before 2007 - the height of the last property rally. This figure, he added, does not bode well when factors such as falling rents and supply glut are taken into account as well.
According to URA's data, the vacancy rate of completed private residential units increased from 5.9 per cent as at the end of Q2 this year to 6.2 per cent as at end Q3.
"Government intervention is inevitable," said Mr Tan, who attributes the strong showing in property sales to excess liquidity from both local and foreign buyers.
"This excess money is too strong to fight," said Mr Tan. He also expects the authorities to consider reducing mortgage loan amount to a lower proportion of the sale price - down from the 80 per cent now.
"If confidence is hit badly, then at least the asset bubble will not be as large," he added.
Meanwhile, Ngee Ann Polytechnic real estate lecturer Nicholas Mak takes a more sanguine view. "I don't think the authorities will put in any measures in the next three to six months," he said. "I expect sales to move forward on a steady keel and keep within the volume of 600 to 1,500 units."
As long as there are no excessive signs of speculation and no sharp price increases, Mr Mak does not expect the authorities to take further action, particularly as the decline in rental is moderating and hitting bottom soon.
"Possible danger signs are when everything starts to go up: Prices, rentals and volume of speculation," he said. "Then that is when the Government may do something."
Jones Lang Lasalle South-east Asia's head of research, Dr Chua Yang Liang, expects transaction volume in the non-landed segment to contract by a further 10 to 20 per cent on the back of the seasonal year-end slowdown and anti-speculative measures.
"However, should housing price growth continue to surge ahead of economic fundamentals despite the recent moral persuasion by the Government to cool residential demand, further anti-speculative measures with a bigger bite could be introduced. For example, a capital gains tax say for those who flip within a two-year period of the first purchase," he said in response to the monthly sales figures released on Monday. Tan Hui Leng
Is the market really cooling off? Some don't think so and expect more measures if exuberance persists
05:55 AM Nov 21, 2009
by Tan Hui Leng
SINGAPORE - Sales of private homes have dipped to their second lowest level this year in October according to data released by the Urban Redevelopment Authority (URA) this week.
While market observers believe that this downward trend was the result of the recent anti-speculative measures introduced by the Government, some analysts are sceptical that the market has started to cool.
According to statistics, sales of new properties have been tapering off in the last three months from 1,805 in August, to 1,143 in September, and 811 in October.
Still, this is after a record of 2,772 units sold in July and way above the year's lowest level in January when only 108 units were sold.
Analysts reckoned that sentiment in the property market had simmered down in August and September as it coincided with the Hungry Ghost Festival, a traditionally quiet period.
Sales failed to pick up in September after the Government announced anti-speculative measures which included the removal of the Interest Absorption Scheme.
However, Chesterton Suntec International's research and consultancy head Colin Tan said that the total of 811 units sold in October was still above average when compared to some 600 homes sold a month before 2007 - the height of the last property rally. This figure, he added, does not bode well when factors such as falling rents and supply glut are taken into account as well.
According to URA's data, the vacancy rate of completed private residential units increased from 5.9 per cent as at the end of Q2 this year to 6.2 per cent as at end Q3.
"Government intervention is inevitable," said Mr Tan, who attributes the strong showing in property sales to excess liquidity from both local and foreign buyers.
"This excess money is too strong to fight," said Mr Tan. He also expects the authorities to consider reducing mortgage loan amount to a lower proportion of the sale price - down from the 80 per cent now.
"If confidence is hit badly, then at least the asset bubble will not be as large," he added.
Meanwhile, Ngee Ann Polytechnic real estate lecturer Nicholas Mak takes a more sanguine view. "I don't think the authorities will put in any measures in the next three to six months," he said. "I expect sales to move forward on a steady keel and keep within the volume of 600 to 1,500 units."
As long as there are no excessive signs of speculation and no sharp price increases, Mr Mak does not expect the authorities to take further action, particularly as the decline in rental is moderating and hitting bottom soon.
"Possible danger signs are when everything starts to go up: Prices, rentals and volume of speculation," he said. "Then that is when the Government may do something."
Jones Lang Lasalle South-east Asia's head of research, Dr Chua Yang Liang, expects transaction volume in the non-landed segment to contract by a further 10 to 20 per cent on the back of the seasonal year-end slowdown and anti-speculative measures.
"However, should housing price growth continue to surge ahead of economic fundamentals despite the recent moral persuasion by the Government to cool residential demand, further anti-speculative measures with a bigger bite could be introduced. For example, a capital gains tax say for those who flip within a two-year period of the first purchase," he said in response to the monthly sales figures released on Monday. Tan Hui Leng
ST Forum : Block eligible for other upgrading schemes
Nov 21, 2009
Block eligible for other upgrading schemes
WE THANK Ms Pamela Hoo for last Saturday's letter, 'Left out of Sers'. The Selective En-bloc Redevelopment Scheme (Sers) is implemented only for old HDB precincts that can be redeveloped to optimise land use. Blocks 110, 111, 113 and 114 Bukit Merah View were identified for Sers based on this principle.
Block 116 is physically separated from the Sers precinct by Bukit Merah View road and Block 115 (market and food centre). Together with the market and food centre, the shops and eating houses in Block 116 form an integral focal point of the community to serve the needs of the surrounding residents.
While Block 116 is not suitable for Sers, it is eligible for other upgrading programmes that can improve lift access and the conditions of the flats. Details will be announced when the plans for the block are firmed up.
Heng Mien Joo (Mrs)
Deputy Director (Projects & Development)
Housing & Development Board
Block eligible for other upgrading schemes
WE THANK Ms Pamela Hoo for last Saturday's letter, 'Left out of Sers'. The Selective En-bloc Redevelopment Scheme (Sers) is implemented only for old HDB precincts that can be redeveloped to optimise land use. Blocks 110, 111, 113 and 114 Bukit Merah View were identified for Sers based on this principle.
Block 116 is physically separated from the Sers precinct by Bukit Merah View road and Block 115 (market and food centre). Together with the market and food centre, the shops and eating houses in Block 116 form an integral focal point of the community to serve the needs of the surrounding residents.
While Block 116 is not suitable for Sers, it is eligible for other upgrading programmes that can improve lift access and the conditions of the flats. Details will be announced when the plans for the block are firmed up.
Heng Mien Joo (Mrs)
Deputy Director (Projects & Development)
Housing & Development Board
ST : No stamp duty boost for Govt
Nov 21, 2009
PROPERTY BOOM
No stamp duty boost for Govt
More units sold, but these may not match up to last year's overall value
By Fiona Chan
THIS year's surprise housing boom may have provided an unexpected windfall for property owners - but not necessarily for the Government.
Developers and individual sellers will probably sell twice the number of private homes this year than they did last year, going by the latest property market figures.
However, the Government is unlikely to see an increase in its revenues from stamp duty, which is a tax on transactions such as property sales.
This is mainly because many of the homes sold in the current boom are much smaller in size and located in the cheaper suburban areas.
So the value of homes sold this year - which determines the amount of stamp duty payable - may not surpass that of last year, when more luxury homes were sold, say property consultants.
Stamp duty takings so far this year bear this out. From January to September, the Government took in $1.37 billion in stamp duty, according to figures from the Department of Statistics website.
This is about 15 per cent less than in the same period last year, even though the property market was slowing down then in anticipation of the financial crisis that hit hard in September that year.
For the whole of last year, the Government received $1.84 billion in stamp duty. This year's stamp duty collections may be about the same level or even lower, now that the property boom appears to be losing steam, say property consultants.
However, stamp duties look set to exceed the Government's initial expectations at the beginning of the year, when the recession was at its worst and the property market was in a slump.
In its January Budget, the Government projected stamp duty takings of only $1billion for the 2009 financial year, which started in April and ends in March next year. So far, between April and September, the Government has already collected $1.1 billion.
Stamp duty is a tax on commercial and legal documents used in some transactions such as property sales, which make up the bulk of stamp duty collections.
For housing transactions, stamp duty ranges from 1 per cent to 3 per cent of the purchase price. In the massive boom year of 2007, stamp duty reached a record $4.1 billion.
In the first nine months of this year alone, almost 25,800 private homes were sold - nearly double the number sold in the whole of last year.
But the sizes of the homes sold this year have generally shrunk, said Dr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.
'Because unit sizes have fallen, the total quantum of the home price is less,' he said. 'The market value of transactions this year actually remains at about the same level as last year.'
A spike in demand for smaller mass-market homes means that while property developers are likely to double their sales of new homes this year compared with last year, the total value of sales will be halved, according to recent research by property consultancy CB Richard Ellis (CBRE).
In the coming months to the end of the Government's 2009 financial year, there may be a pick-up in sales of upmarket homes, which could add to stamp duty collections, said Mr Li Hiaw Ho, executive director of CBRE Research.
He said the higher-end segment of the property market has not moved much in the current boom, but recent improved economic data may attract more buyers.
Foreigners, in particular, could be drawn back into the market early next year after the festive season is over, said Dr Chua.
'The economy is showing a better outlook, and there is more bullishness compared with six months ago, so there is a potential for more interest in the high-end market,' he said.
PROPERTY BOOM
No stamp duty boost for Govt
More units sold, but these may not match up to last year's overall value
By Fiona Chan
THIS year's surprise housing boom may have provided an unexpected windfall for property owners - but not necessarily for the Government.
Developers and individual sellers will probably sell twice the number of private homes this year than they did last year, going by the latest property market figures.
However, the Government is unlikely to see an increase in its revenues from stamp duty, which is a tax on transactions such as property sales.
This is mainly because many of the homes sold in the current boom are much smaller in size and located in the cheaper suburban areas.
So the value of homes sold this year - which determines the amount of stamp duty payable - may not surpass that of last year, when more luxury homes were sold, say property consultants.
Stamp duty takings so far this year bear this out. From January to September, the Government took in $1.37 billion in stamp duty, according to figures from the Department of Statistics website.
This is about 15 per cent less than in the same period last year, even though the property market was slowing down then in anticipation of the financial crisis that hit hard in September that year.
For the whole of last year, the Government received $1.84 billion in stamp duty. This year's stamp duty collections may be about the same level or even lower, now that the property boom appears to be losing steam, say property consultants.
However, stamp duties look set to exceed the Government's initial expectations at the beginning of the year, when the recession was at its worst and the property market was in a slump.
In its January Budget, the Government projected stamp duty takings of only $1billion for the 2009 financial year, which started in April and ends in March next year. So far, between April and September, the Government has already collected $1.1 billion.
Stamp duty is a tax on commercial and legal documents used in some transactions such as property sales, which make up the bulk of stamp duty collections.
For housing transactions, stamp duty ranges from 1 per cent to 3 per cent of the purchase price. In the massive boom year of 2007, stamp duty reached a record $4.1 billion.
In the first nine months of this year alone, almost 25,800 private homes were sold - nearly double the number sold in the whole of last year.
But the sizes of the homes sold this year have generally shrunk, said Dr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.
'Because unit sizes have fallen, the total quantum of the home price is less,' he said. 'The market value of transactions this year actually remains at about the same level as last year.'
A spike in demand for smaller mass-market homes means that while property developers are likely to double their sales of new homes this year compared with last year, the total value of sales will be halved, according to recent research by property consultancy CB Richard Ellis (CBRE).
In the coming months to the end of the Government's 2009 financial year, there may be a pick-up in sales of upmarket homes, which could add to stamp duty collections, said Mr Li Hiaw Ho, executive director of CBRE Research.
He said the higher-end segment of the property market has not moved much in the current boom, but recent improved economic data may attract more buyers.
Foreigners, in particular, could be drawn back into the market early next year after the festive season is over, said Dr Chua.
'The economy is showing a better outlook, and there is more bullishness compared with six months ago, so there is a potential for more interest in the high-end market,' he said.
BT : Preview of Marina Bay Suites next week
Business Times - 21 Nov 2009
Preview of Marina Bay Suites next week
By KALPANA RASHIWALA
AFTER an almost two-year wait, Marina Bay Suites will finally be previewed next Wednesday to VVIPs and invited buyers, BT understands.
Pricing for the preview has not been finalised, but some market watchers suggest it could be a shade below $2,500 per sq ft on average. Others tip the average price at about $2,300 psf. No interest absorption scheme will be offered.
Early last year - when the 99-year leasehold project was expected to be released - the average price was tipped at about $2,800 psf.
The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses.
Three-bedders range from about 1,570 to 1,620 sq ft; four-bedders will be 2,050 to almost 2,700 sq ft. The penthouses include two duplex units of about 4,700 and 8,100 sq ft and a single-level unit of around 5,600 sq ft.
Marina Bay Suites was due to be released early last year, but steadily worsening market conditions that culminated in the global financial slump meant the project could not be released in 2008. In March this year, Keppel Land - which is part of the consortium developing the condo - confirmed the project's construction was deferred.
The other members of the consortium are Hongkong Land and Cheung Kong Holdings/ Hutchison Whampoa. Marina Bay Suites will be the second residential project on the Business and Financial Centre site, which the consortium bagged in a Singapore Government tender in 2005.
The first residential project - the 428-unit Marina Bay Residences (MBR) - sold out in three days in December 2006. The 55-storey development achieved an average price in the region of $1,850 psf, according to a statement by the developer at the time.
Many buyers flipped their units - in some cases within days of their purchase - for handsome gains as high as $1 million or even more for four-bedroom units that face Marina Bay.
MBR has one and two-bedroom units in addition to three and four-bedders. The project, along with the neighbouring completed development, The Sail @ Marina Bay, continues to make news in the secondary market. Sources say a 900 sq ft bay-front unit on the 50th floor at The Sail sold recently for about $3,000 psf, while a 30-odd storey four-bedder at MBR facing the bay fetched just above $2,700 psf.
Marina Bay Suites' preview will be held on the mezzanine level of One Raffles Quay.
THE SUITE LIFE
The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses. Market watchers suggest average price could be slightly below $2,500 per sq ft
Preview of Marina Bay Suites next week
By KALPANA RASHIWALA
AFTER an almost two-year wait, Marina Bay Suites will finally be previewed next Wednesday to VVIPs and invited buyers, BT understands.
Pricing for the preview has not been finalised, but some market watchers suggest it could be a shade below $2,500 per sq ft on average. Others tip the average price at about $2,300 psf. No interest absorption scheme will be offered.
Early last year - when the 99-year leasehold project was expected to be released - the average price was tipped at about $2,800 psf.
The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses.
Three-bedders range from about 1,570 to 1,620 sq ft; four-bedders will be 2,050 to almost 2,700 sq ft. The penthouses include two duplex units of about 4,700 and 8,100 sq ft and a single-level unit of around 5,600 sq ft.
Marina Bay Suites was due to be released early last year, but steadily worsening market conditions that culminated in the global financial slump meant the project could not be released in 2008. In March this year, Keppel Land - which is part of the consortium developing the condo - confirmed the project's construction was deferred.
The other members of the consortium are Hongkong Land and Cheung Kong Holdings/ Hutchison Whampoa. Marina Bay Suites will be the second residential project on the Business and Financial Centre site, which the consortium bagged in a Singapore Government tender in 2005.
The first residential project - the 428-unit Marina Bay Residences (MBR) - sold out in three days in December 2006. The 55-storey development achieved an average price in the region of $1,850 psf, according to a statement by the developer at the time.
Many buyers flipped their units - in some cases within days of their purchase - for handsome gains as high as $1 million or even more for four-bedroom units that face Marina Bay.
MBR has one and two-bedroom units in addition to three and four-bedders. The project, along with the neighbouring completed development, The Sail @ Marina Bay, continues to make news in the secondary market. Sources say a 900 sq ft bay-front unit on the 50th floor at The Sail sold recently for about $3,000 psf, while a 30-odd storey four-bedder at MBR facing the bay fetched just above $2,700 psf.
Marina Bay Suites' preview will be held on the mezzanine level of One Raffles Quay.
THE SUITE LIFE
The 66-storey condo block has 221 units, comprising 218 three- or four-room apartments and three penthouses. Market watchers suggest average price could be slightly below $2,500 per sq ft
BT : HK clamps down on marketing of apartments
Business Times - 21 Nov 2009
HK clamps down on marketing of apartments
(Hong Kong)
HONG KONG plans to tighten restrictions on marketing of uncompleted apartments, responding to concerns that misleading sales tactics by property developers have contributed to a surge in prices this year.
The measures will require developers to provide more transparency about the square footage of apartments they are selling before completing, as well as information on floor numbering, said a statement from the Transport and Housing Bureau.
Chief Executive Donald Tsang told reporters yesterday about the rules, which were reached in an agreement with the Real Estate Developers Association of Hong Kong.
Hong Kong said developers will need to spell out the usable square footage inside the homes. It also will require that developers 'provide floor numbering information in a more prominent manner in the sales brochures'.
Hong Kong developers also will need to publicly disclose transactions of uncompleted apartments within five working days of signing a preliminary sales agreement, down from the current one month. -- Bloomberg
HK clamps down on marketing of apartments
(Hong Kong)
HONG KONG plans to tighten restrictions on marketing of uncompleted apartments, responding to concerns that misleading sales tactics by property developers have contributed to a surge in prices this year.
The measures will require developers to provide more transparency about the square footage of apartments they are selling before completing, as well as information on floor numbering, said a statement from the Transport and Housing Bureau.
Chief Executive Donald Tsang told reporters yesterday about the rules, which were reached in an agreement with the Real Estate Developers Association of Hong Kong.
Hong Kong said developers will need to spell out the usable square footage inside the homes. It also will require that developers 'provide floor numbering information in a more prominent manner in the sales brochures'.
Hong Kong developers also will need to publicly disclose transactions of uncompleted apartments within five working days of signing a preliminary sales agreement, down from the current one month. -- Bloomberg
BT : HK faces asset bubble risk: central bank
Business Times - 21 Nov 2009
HK faces asset bubble risk: central bank
It attracted record HK$567.5 billion in fund inflows in the past 13 months
(Hong Kong)
HONG KONG'S central bank chief Norman Chan warned that asset prices in the city could climb sharply next year and disconnect from fundamentals, raising the risk of a bubble, and said surging capital inflows posed a dilemma for policymakers across Asia.
'With interest rates exceptionally low and with abundant liquidity around the world, Hong Kong faces the potential risk next year that asset prices may go up sharply and become increasingly disconnected from economic fundamentals,' Mr Chan, head of the Hong Kong Monetary Authority, said in an article on its website.
While other economies could raise interest rates in a bid to curb inflation in assets such as property, that tactic could backfire and attract even more outside investors who are hungry for higher yields, Mr Chan noted.
Hong Kong faces a different challenge. Its currency peg to the US dollar forces it to track monetary policy in the United States, which is expected to keep rates low for some time.
The financial centre, a key gateway to mainland China, also prides itself on its open economy and thus would be unlikely to look at capital controls at this stage, analysts said. However, more measures to curb property speculation may be in the offing.
Emerging markets such as Brazil and Taiwan have both announced capital controls in recent weeks to keep what they say are 'hot money' speculative flows from fuelling sharp gains in their currencies and destabilising their recovering economies.
Russia said on Thursday it would consider 'soft' measures to curb inflows, while Indonesia is also studying ways to control foreign investment in one-month central bank bonds.
Hong Kong attracted a record HK$567.5 billion (S$101.8 billion) in fund inflows between Oct 1 2008 and Nov 13, 2009, according to the HKMA. That has helped Hong Kong stock prices soar 57 per cent this year and property prices surge nearly 30 per cent.
Prices of luxury property in the city, however, have surged over 40 per cent this year as mainland Chinese have been snapping up apartments. A weak dollar and expectations that US, and therefore Hong Kong interest rates will stay low for some time are also encouraging foreigners to buy Hong Kong assets.
That prompted the HKMA last month to tighten mortgage lending rules, especially on luxury property, by capping the mortgage limit for property valued at US$2.6 million or more at 60 per cent, compared with 70 per cent previously. However, as many mainland Chinese buyers are flush with cash, that may not work.
The government has also said it is ready to release more land for sale to ward off a possible property bubble. This week it announced its first large-scale land sale in two years.
Mr Chan said it was not easy to say whether Hong Kong was now seeing an asset bubble but warned that values risked deviating from fundamentals.
Massive fund flows into the city's banking system have put intense upward pressure on the Hong Kong dollar, forcing the HKMA to intervene repeatedly to keep the currency within its trading band against the US dollar.
The HKMA has injected a record HK$620 billion since October 2008.
In nearby South Korea, officials have also warned of the risk of a housing bubble and have threatened to raise interest rates from a record low 2 per cent to calm prices. -- Reuters
HK faces asset bubble risk: central bank
It attracted record HK$567.5 billion in fund inflows in the past 13 months
(Hong Kong)
HONG KONG'S central bank chief Norman Chan warned that asset prices in the city could climb sharply next year and disconnect from fundamentals, raising the risk of a bubble, and said surging capital inflows posed a dilemma for policymakers across Asia.
'With interest rates exceptionally low and with abundant liquidity around the world, Hong Kong faces the potential risk next year that asset prices may go up sharply and become increasingly disconnected from economic fundamentals,' Mr Chan, head of the Hong Kong Monetary Authority, said in an article on its website.
While other economies could raise interest rates in a bid to curb inflation in assets such as property, that tactic could backfire and attract even more outside investors who are hungry for higher yields, Mr Chan noted.
Hong Kong faces a different challenge. Its currency peg to the US dollar forces it to track monetary policy in the United States, which is expected to keep rates low for some time.
The financial centre, a key gateway to mainland China, also prides itself on its open economy and thus would be unlikely to look at capital controls at this stage, analysts said. However, more measures to curb property speculation may be in the offing.
Emerging markets such as Brazil and Taiwan have both announced capital controls in recent weeks to keep what they say are 'hot money' speculative flows from fuelling sharp gains in their currencies and destabilising their recovering economies.
Russia said on Thursday it would consider 'soft' measures to curb inflows, while Indonesia is also studying ways to control foreign investment in one-month central bank bonds.
Hong Kong attracted a record HK$567.5 billion (S$101.8 billion) in fund inflows between Oct 1 2008 and Nov 13, 2009, according to the HKMA. That has helped Hong Kong stock prices soar 57 per cent this year and property prices surge nearly 30 per cent.
Prices of luxury property in the city, however, have surged over 40 per cent this year as mainland Chinese have been snapping up apartments. A weak dollar and expectations that US, and therefore Hong Kong interest rates will stay low for some time are also encouraging foreigners to buy Hong Kong assets.
That prompted the HKMA last month to tighten mortgage lending rules, especially on luxury property, by capping the mortgage limit for property valued at US$2.6 million or more at 60 per cent, compared with 70 per cent previously. However, as many mainland Chinese buyers are flush with cash, that may not work.
The government has also said it is ready to release more land for sale to ward off a possible property bubble. This week it announced its first large-scale land sale in two years.
Mr Chan said it was not easy to say whether Hong Kong was now seeing an asset bubble but warned that values risked deviating from fundamentals.
Massive fund flows into the city's banking system have put intense upward pressure on the Hong Kong dollar, forcing the HKMA to intervene repeatedly to keep the currency within its trading band against the US dollar.
The HKMA has injected a record HK$620 billion since October 2008.
In nearby South Korea, officials have also warned of the risk of a housing bubble and have threatened to raise interest rates from a record low 2 per cent to calm prices. -- Reuters
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