that means retirees can no longer buy properties for investment?not very logical leh?
Originally Posted by indomie
Senior
that means retirees can no longer buy properties for investment?
Junior
and how do you enforce this on foreigners ? a PRC can produce an income of 100,000 CNY a month no problemthat means retirees can no longer buy properties for investment?
and self employed, massively undeclared type (agents, small shop bosses), all cannot buy anything already rite ?
Junior
I wonder if rental income also count in MSR?
Senior
so u think such a measure or anything related to it is unlikely?
and how do you enforce this on foreigners ? a PRC can produce an income of 100,000 CNY a month no problem
and self employed, massively undeclared type (agents, small shop bosses), all cannot buy anything already rite ?
Junior
I think it's unlikely. You might as well declare no SGD loan to foreigners full stop. MAS did this in 1996.
and also buying as a company how to enforce "income" ?
Senior
LTV for buying as a company is already low enough not to require income leh.
wah, u open golden mouth, later MAS declare no sgd loan to foreigners and then 30% MSR for locals!
Newbie
so far commercial properties have completely CM exempt.
are they going to be so behind the curve again in that sector
Newbie
like tha the rich get richer and can stay private and middle class can stick to hdb?
Junior
oh sei liao!!!!
"Among the new rules announced by Beijing on Friday was a 20 percent capital gains tax on home sales, well up from the previous one to two percent of the sale price"
http://www.channelnewsasia.com/stori...257773/1/.html
lai lai, more hot money lai liao......time to roll out the carpet for the ultra rich PRCs
Senior
China latest cooling measures really deadly.
China shares end down 3.7% on property rules
Posted: 04 March 2013 1644 hrs
<a style="display: block;" class="addthis_counter addthis_pill_style ie7" href="http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1257773/1/.html#" addthis:url="http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1257773/1/.html" url="http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1257773/1/.html" ost="1" shares="0">
SHANGHAI - Chinese shares fell 3.65 percent to close at a seven-week low after the government last week unveiled fresh measures to cap rising property prices, dealers said.
The benchmark Shanghai Composite Index ended down 86.11 points to 2,273.40 on turnover of 143.0 billion yuan (US$23.0 billion), its weakest finish since January 11, when the index ended at 2,243.00.
It was also the biggest single-day decline since August 8, 2011.
Among the new rules announced by Beijing on Friday was a 20 percent capital gains tax on home sales, well up from the previous one to two percent of the sale price.
The government also ordered the central bank to raise downpayments and mortgage lending rates for buyers of second homes in some cities, and told local governments to limit non-residents from buying more than one home.
Property prices are a sensitive issue in China and authorities have sought to control them over the past three years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and taxes in some cities on multiple and non-locally-owned homes.
"The market's rebound, starting in early December, might be over because of the government's fresh tightening measures," Everbright Securities chief strategist Teng Yin told Dow Jones Newswires.
"The new measures issued on Friday are much more rigorous than expected," he added. "The overall market and stocks that are closely related to the housing market, such as cement and home appliance makers, are declining sharply."
Poly Real Estate slumped almost 10 percent to 11.37 yuan, while developer Gemdale also dropped nearly 10 percent to 6.42 yuan.
Shaanxi Qinling Cement was 10 percent off at 6.20 yuan and Zhejiang Jianfeng Group fell 8.26 percent to 9.44 yuan.
But Liu Ligang, an economist for Australia and New Zealand Banking Group in Hong Kong said the impact of the new rules would not be long-lasting.
"Such policies will always have a temporary, noisy, and negative impact," he said in a research note, citing China's continuing urbanisation.
"Long-term demand (for property) will not suddenly disappear," he said.
Junior
What if SG also impose Capital Gains Tax?
Office Boy
When they decided on such heavy ABSD SSD, they have already decided that cap gain tax is not to be considered for a long time.What if SG also impose Capital Gains Tax?
This China CM is likely to re-direct funds into Singapore. Countries are now playing the "whose CM is worse" game. Imagine if you are a rich multi millionnaire in China, suddenly Singapore properties look more attractive now vis-a-vis China properties.... At least in Singapore u pay 15% ABSD, you can buy as many as you want - u then add this 15% to your cost and mark up with u sell 4 years later (if possible).
We can wait and see if this tilts the China money back to Sg properties.
DKSG
Junior
http://sbr.com.sg/commercial-propert...property-curbs
Singapore Business Review
COMMERCIAL PROPERTY | Staff Reporter, Singapore
Published: 04 Mar 2013
Here's how Singapore developers will be hit by China's property curbs
Will 10% home price dip hurt them?
According to CIMB, Singapore developer stocks that have meaningful exposure in China could see selling pressure in the wake of this event.
But the firm notes that most large-caps have diversified exposure across different asset classes in the China property sector.
The residential segment makes up less of the Singapore developers’ GAV when compared to their China counterparts.
Here's more from CIMB:CMA and GLP have large exposure in China but they are primarily in retail malls (49% of GAV) and logistics/warehousing (53% of GAV), respectively.
While CapLand still has unsold inventory in China’s tier-1 cities, its China residential GAV remains manageable at only 12% of the total.
Among the large caps, KepLand has the largest exposure with 29% of its GAV in China residential; we estimate that a 10% decline in residential prices will lead to a 6% drop in RNAV, the most among its peers.
Among the small-caps, Hobee has the largest China residential exposure at 24% of its GAV.
Junior
http://sbr.com.sg/commercial-propert...yed-until-2014
Singapore Business Review
COMMERCIAL PROPERTY | Staff Reporter, Singapore
Published: 04 Mar 2013
UOL's Changfeng project launch delayed until 2014
It was supposed to be released this year.
According to Nomura, UOL's residential property sales in FY12 were chiefly driven by Katong Regency (244 units sold during the year; fully sold) and Archipelago (473 units sold during the year; fully sold).
St. Patrick’s Garden redevelopment (186 units) and the Bright Hill Drive project (445 units) are scheduled to be launched in the near term.
Here's more from Nomura:Overseas property sales in FY12 were led by The Esplanade in Tianjin (188 units out of total 522 units sold during the year). While the take-up was more robust than what we had projected, the ASP achieved of c.RMB17,000psm was lower than our expectation.
On the other hand, the Changfeng project in Shanghai is now scheduled to be launched only in 2014F (vs. 2013 previously).
Junior
Fallen Angel
Senior
we have forummers here in to manga??
Senior
siao liao lor, sg gonna need cooling measures to ban sgd loans to foreigners liao lor.
Newbie
This appears to be a protective measure for the banking industry.
It will affect retired and "early retirement" investors as well as cash rich foreign investors whose "income source" cannot be verified.
Junior
http://www.cnbc.com/id/100521104
Why China's Property Market Is Getting Scary
Published: Tuesday, 5 Mar 2013 | 2:33 AM ET
By: Ansuya Harjani
Assistant Producer, CNBC Asia
Worries that China's home market is over heating are spreading beyond mainland policymakers -- who recently unveiled a slew of cooling measures -- with key industry players including the head of the country's largest real estate developer warning of huge risks in the sector.
Wang Shi, CEO of Vanke said on CBS News' "60 Minutes" show over the weekend that China's property sector was already in a bubble state.
China has seen a boom in the property sector recently, with some cities seeing a 10-fold increase in prices, that have driven the average home buyer out of the market. According to estimates, the cost of a home in Shanghai would be around 45 times the average resident's annual salary.
Shi added that if the property bubble were to burst, it would be a "disaster," with a plunge in home prices sparking an "Arab Spring" type social unrest.
Real estate is among the most popular investment vehicles in the country, given volatility in the domestic equity markets, so a steep decline in prices would impact millions of local investors.
The Chinese government announced last Friday measures to curb speculative demand and stabilize prices. It called for stricter enforcement of a 20 percent capital gains tax on home sale profits and asked cities with fast property price increases to raise the down payment requirement and mortgage rates on second homes.
This spooked investors dragging the Shanghai property sub-index 9.3 percent lower on Monday, its biggest daily loss since 2008, as property analysts predicted a 10 percent drop in home prices over the next three to six months.
The outlook for China's real estate sector has serious implications for the commodities market and growth in the world's second largest economy. Property investment accounts for over almost 14 percent of the country's gross domestic product (GDP).
China economist Patrick Chovanec said the heavy construction pipeline in the housing sector was the "biggest concern" in his outlook for the market. The construction boom in recent years, for example, has led to the emergence of so-called ghost towns, or uninhabited townships.
The ratio of residential floor space under construction to floor space sold is rising, in 2012 for every one square meter of space sold 4.4 square meter was under construction, a record high. Before the global financial crisis, in 2008, for example, this equation stood at 3.9.
"We would have to see consistently strong demand to absorb what's in the pipeline," Chovanec told CNBC in a recent interview.
Dariusz Kowalczyk, senior economist, Asia ex-Japan at Credit Agricole, however, is not concerned about oversupply conditions in China.
"Urbanization ensures demand in the cities will remain strong because that's where everyone wants to move," he said.
In addition, "The government has been skillful enough to introduce measures that won't lead to a market crash. It likely prices will stabilize or gains will slow, but we don't have a housing market crash in our central scenario for China."
According to Ren Xianfeng, an economist with IHS Global Insight, a meltdown in the country's housing market would only be caused by two things: a severe slowdown in the economy and/or sharp deleveraging.
"It's not going to take place any time soon, but it's a risk that's building," she said.
Junior
http://www.channelnewsasia.com/stori...258039/1/.html
MPs raise concerns over rising property prices
Channel News Asia
Posted: 05 March 2013 2112 hrs
SINGAPORE: Several Members of Parliament raised concerns over rising property prices and competition with foreign investments.
They suggested the government look to existing policy frameworks in other countries as examples of how to curb foreign speculation of property.
Mr Christopher De Souza, MP for Holland-Bukit Timah GRC, said: "In Australia, all acquisitions of residential real estate by foreign interest require prior foreign investment approval.
"The Australian model essentially allows foreigners to buy new developments while restricting their subsequent sale to Australian residents at a price they can reasonably afford. We can institute this double prevention model in Singapore as it both tempers investment demand and restricts the resale incentive."
Mr R Dhinakaran, Nominated MP, said: "I will also like to point the attention towards measures in larger land rich neighbouring country Malaysia, where properties below 500,000 ringgits are reserved for Malaysians only.
"This ensures the quantum of monies competing for normal houses is not unlimited. In other words, it is a competition of equals at least in some way. Further, to avoid foreigners from speculating we could impose rules to ensure foreigner buying a property cannot avail any loan from banks in Singapore. This would mean leveraging will not fuel in speculation in the property sector."
- CNA/de
Junior
http://www.channelnewsasia.com/stori...258050/1/.html
En bloc sales market set to cool further in 2013: analysts
Channel News Asia
By Thomas Cho | Posted: 05 March 2013 2255 hrs
SINGAPORE: The moribund property en bloc sales market looks set to cool down further. Experts expect total transactions in the collective sales market to decline to around S$1.5 billion in 2013.
Global real estate services firm, Jones Lang LaSalle expects en bloc activities in Singapore to slow down from S$3 billion in 2011 to S$2 billion in 2012 and likely to go even lower than 2012 numbers this year.
However, property analysts said developers are still on the lookout for land to develop and they will likely go for smaller plots.
En bloc sales activities reached fever-pitch in 2007 -- hitting a value of close to S$12 billion. But the recent slew of property cooling measures -- like restricting the loan tenure, the additional buyer's stamp duty, and the latest changes in property tax structure -- has somewhat cooled down the segment.
Several developments, like Villa Des Flores in the prime district 11 area -- which has been put up for collective sale for the third time since its initial launch in June 2012 --, has remained unsold.
Karamjit Singh, head of investments & residential at Jones Lang LaSalle, said: "With caution in the air, developers tend to be a bit more circumspect with land acquisitions, but that does not necessarily mean the en bloc market is totally dead. Overall, we expect volume to slow down compared to the last two years."
Property experts said there is still demand for en bloc sites in niche areas. For instance, an en bloc deal was just completed for Ultra Mansion in the Novena district. The 48-unit development was sold for over S$149 million to a Hong Kong-listed real estate developer.
Meanwhile, property consultant Jones Lang La Salle said it is looking to close two residential en bloc sales transaction soon.
Christina Sim, director of investment for capital markets at Cushman & Wakefield, said: "Properties in well located hubs, properties near MRT stations and properties basically below the S$200 million mark or even the S$100 million mark, it is still very saleable and there is still a shortage. I feel that developers still need to land bank and they still need to find suitable sites for development."
Although the government has released more land sites under its land sales programme, experts said they may not be suitable for the smaller developers because of their larger plot sizes and high reserve prices.
Also, consultants said developers are now moving into the retail and commercial en bloc space as well. San Centre, a 12-storey office building along Chin Swee Road, is now up for collective sale by tender.
-CNA/ac
Junior
http://sbr.com.sg/commercial-propert...-and-go-abroad
Singapore Business Review
COMMERCIAL PROPERTY | Staff Reporter, Singapore
Published: 06 Mar 2013
Singapore property developers are starting to pack up and go abroad
Residential sector is scaring them off.
According to CIMB, developers' core 4Q12 results were mostly in line as lower development earnings have been built into expectations. This was evident for the more Singapore-centric developers.
The strong yoy gains came from 1) revaluation gains on compressed cap rates and rental reversions (REITs, CapLand and UOL) and completion of development projects (UOL, CMA and GLP) and 2) overseas profits on the hand over of the China residential projects (CapLand and KepLand).
Here's more from CIMB:We expect these two trends to continue dictating earnings for developers in FY13. While the recent implementation of policy curbs in China is likely to curtail development volumes, most of the sales for FY13 delivery have already been locked in.
What stood out in this season outside the results were 1) developers' bearish view on the Singapore residential sector and 2) increased willingness to venture overseas to diversify income.
The latter was evident among the more Singapore-domiciled developers like CityDev, UOL and OUE which indicated that part of their excess capital could increasingly be allocated to overseas investments.
The common target areas mentioned were China and Iskandar/Malaysia though most also said that they will adopt a measured approach.
Another commonality is the preference for non-residential assets, both locally and overseas, a reflection of the developer‟s less sanguine view on the Singapore and China housing markets.
In Singapore, most believe that property prices will correct after the recent cooling measures. The latest cooling measures in Singapore and China have deflated RNAV upside potential for the Singapore developers though we note that exposures to these remain manage able
Senior
or you can buy their stocks, let them do the running around the world. you sit here and collect dividends.
Junior
http://www.channelnewsasia.com/stori...258244/1/.html
Eurozone recession deepens
Channel News Asia
Posted: 06 March 2013 2018 hrs
BRUSSELS: The 17-nation Eurozone sank further into recession in the last three months of 2012 as the debt crisis continued to exact a heavy price, official data showed Wednesday.
The Eurozone economy shrank 0.6 percent in the fourth quarter of 2012 compared with the third quarter when it contracted 0.1 percent, the Eurostat data agency said, confirming initial estimates given in February.
For the full 27-member European Union, the economy was 0.5 percent smaller in the fourth quarter after a marginal gain of 0.1 percent in the third, Eurostat said.
A recession is counted as two consecutive quarterly economic contractions.
Compared with fourth quarter 2011, the Eurozone economy was down 0.9 percent and the EU 27 off 0.6 percent.
Among the major economies, European powerhouse Germany shrank 0.6 percent in the fourth quarter after a gain of 0.2 percent in the third and France slipped 0.3 percent after growth of 0.1 percent.
Non-euro Britain lost 0.3 percent after sharp growth of 1.0 percent in the third quarter, boosted by the London Olympics.
Among the fourth quarter best performers were Estonia, which grew 0.9 percent and Lithuania, up 0.7 percent, while bailed-out Portugal was the weakest, with its economy shrinking 1.8 percent.
Eurostat said that for 2012 as a whole, the Eurozone economy contracted 0.6 percent and the EU 0.3 percent.
Data so far for 2013 suggests the European economy is stabilising after a very bad 2012 but the outlook remains weak and uncertain.
Howard Archer of IHS Global Insight said the Eurozone recession may have deepened in the fourth quarter but it should mark the bottom of the slump.
"The good news is that the fourth quarter of 2012 almost certainly marked the low point for Eurozone economic activity as a significant easing of Eurozone sovereign debt tensions underpinned by the European Central Bank's policy actions" has boosted confidence and the markets, Archer said in a statement.
"The bad news is that real economic activity is yet to show major improvement in many countries and it looks highly likely that growth will remain a major struggle for the Eurozone for some time to come."
-AFP/fl
Junior
http://sbr.com.sg/commercial-propert...estment-demand
Singapore Business review
COMMERCIAL PROPERTY | Staff Reporter, Singapore
Published: 07 Mar 2013
New property policies could badly hurt investment demand
You'll be surprised at the tax rates.
According to Knight Frank, the new property tax policies are akin to 'another shot' on top of the existing cooling measures, which could discourage purchase of private properties for investment purposes, while having a marginal impact on owner-occupied residential properties.
Under the new policies, property tax rate for non-owner-occupied residential properties and vacant residential properties are more than twice the rate for owner-occupied properties, given similar Annual Value (AV).
Here's more from Knight Frank:For example, a property with AV of $60,000 will be subject to property tax rates of up to 5 or 6 per cent if it is occupied by the owners; or up to 13 or 14 per cent if it is leased out or vacant.
In another case, a property with AV of $70,000 will be subject to property tax rates of up to 6 per cent if it is occupied by the owners and up to 15 per cent or 16 per cent if it is leased out or vacant.
In terms of property tax payable, investment properties will also see higher increase compared to owner-occupied properties. For example, a $12,000-AV property saw a decline of 33 per cent in payable tax quantum if it is owner-occupied but saw no change in payable tax quantum if it is leased out or left vacant.
A property of $100,000 AV will experience 23 per cent tax increase under owner-occupation status and 40 per cent tax increase under investment status.
Holding costs for residential homes as an investment asset become higher with this new property tax regime. While ABSD is a one-off initial cost, property tax is an annual expenditure, which adds a fair bit of costs to high-end home owners and investors.
The removal of property tax refund concession for vacant properties further discourages speculators and short-term investors who look for capital gains rather than long-term investment returns.
These buyers can no longer claim tax refund by leaving their units vacant, and letting out is another way to mitigate holding cost with a rental income stream.
With lease contracts varying from 1-year to 3-year term and coupled with initial fitting out costs, it might be more worthwhile for investors to hold their units over a longer period to plough back costs than flipping vacant units for quick capital gains.
Junior
http://sbr.com.sg/residential-proper...leasing-market
Singapore Business Review
RESIDENTIAL PROPERTY | Staff Reporter, Singapore
Published: 07 Mar 2013
Luxury home owners must brace themselves for tighter leasing market
Especially with a slew of 86,000 units.
According to Knight Frank, with the removal of property tax refund concession, property investors will inadvertently face higher risk from higher taxes.
Some may lower rents to quickly secure a tenant to counter higher taxes with the inability to claim vacancy tax refund.
Coupled with the large impending supply of residential properties of about 86,000 units to be completed by 2017, the leasing market would be more competitive especially for owners of luxury residential properties.
Here's more from Knight Frank:In addition, the increases in tax payable would lead to further yield compression, as owners have to fork out additional costs for property tax on top of the other holding costs, such as management fees, income tax and mortgage interest.
The attractiveness of holding a residential investment property for rental income objective would be affected with this new property tax regime.
Property Watcher
Golden rule on 1- only wear those hat that fit your head, don't try to be smart Alex to buy those hats that are much bigger than your head.
Junior
http://www.todayonline.com/singapore...n-says-tharman
Sandwiched class not forgotten, says Tharman
Mr Tharman said the Government intends to bring house prices down ‘not just in the short term, but long-term’. TODAY file photo
Govt intends to bring house prices down relative to income, review healthcare financing
Channel News Asia
By Teo Xuanwei - 08 Mar 2013
SINGAPORE — The sandwiched class will get help in meeting its rising expectations and aspirations, particularly in the affordability of housing and healthcare, Deputy Prime Minister Tharman Shanmugaratnam pledged yesterday, as Parliament approved Budget 2013.
Laying out the Government’s overall approach to social spending, Mr Tharman wrapped up the three-day Budget debate by devoting a part of his speech to outlining changes in the pipeline that will benefit the middle-income, including the review of the healthcare financing framework, where this stratum will be the “major beneficiary”.
For housing, Mr Tharman noted that home prices have risen “much faster” than incomes in the last few years. The Government intends to “bring house prices down relative to income — not just in the short-term, but long-term”, he said.
Details will be shared in the Committee of Supply debates for the Ministry of Health and the Ministry of National Development.
Challenges facing middle-income Singaporeans that Members of Parliament (MPs) have raised over the past three days included employment opportunities and whether they have largely been left out of the goodies in this year’s fiscal measures.
Mr Tharman reiterated that the sandwiched class has not been forgotten, pointing to how, for instance, the Wage Credit Scheme was “deliberately” designed to include middle-income earners as one way to ensure a level playing field for Singaporeans in terms of job opportunities and career progression.
There have also been “adequate benefits” from the Government’s overall fiscal system that have flowed to the middle-income, he noted, citing the “significant improvements” that have been made in recent years, including in childcare subsidies and expanding university bursaries to children from middle-income households.
Overall, the social support system for this group revolved around growing their incomes while keeping their taxes low, said Mr Tharman, who is also Finance Minister.
Referring to the Budget’s focus on economic restructuring, he said: “First and foremost, we’ve got to succeed in quality growth ... to provide for income growth for Singaporeans, including especially the middle-income group.
“Good jobs with incomes that can go up and more than cover the cost of living ... that’s a key priority. Quality growth is not just an economic strategy but a social strategy.”
He added: “Through our priority to achieve quality growth, and through keeping the tax burden low, we would be able to allow the middle-income group’s disposable income to rise. That’s our basic strategy.”
Mr Tharman also spoke about the lower-income, noting that the Government had to tailor its social support measures to meet the “distinct needs” of older and younger lower-income households. Given that older low-income earners received little education and have seen only slight improvements to their wages, Mr Tharman said that the key to ensuring they can age with dignity was through pay supplement schemes, such as Workfare, and boosting their employability through the Special Employment Credit and Workfare Training Scheme, among others.
The younger generation of lower-income Singaporeans required a different strategy. “Provide every leg-up, rather than a handout. Social mobility is a key feature of our policies,” he said.
“We have to be a continuous meritocracy ... constant opportunities to upgrade, to switch line, to pick up new skills, to develop new mastery.”
Singapore’s social support system should also not just be about spending more, but about “spending better in achieving our objectives” of helping people to “stand on their own feet” and targeting help at those who need it most. He cited how despite the United States significantly enhancing income transfers to the poor since the 1970s, poor neighbourhoods have gotten worse.
He added that the Government is “not going for progressivity or redistribution for its own sake”, rather, it designs policies that stand the best chance of sustaining economic dynamism and building a society that all Singaporeans can truly benefit from.
“The litmus test is not how progressive a fiscal system looks. The litmus test is whether it will truly help lower- and middle-income Singaporeans to have better lives, and that is not a question with straight forward answers,” said Mr Tharman.
He noted that schemes like the Workfare Income Supplement were in fact “negative taxes”, which meant Singapore’s tax structure did not only span zero to 20 per cent tax, rather, it was negative 30 per cent to positive 20 per cent.
Junior
http://www.bloomberg.com/news/2013-0...ered-says.html
Hong Kong Mortgage Rule May Boost Rates, Standard Chartered Says
Bloomberg
By Stephanie Tong - Mar 7, 2013 1:58 PM GMT+0800
Hong Kong banks may increase the interest rates they charge on mortgages as the city’s new risk rule pushes up funding costs, said Benjamin Hung, chief executive officer for the city at Standard Chartered Plc. (STAN)
The Hong Kong Monetary Authority on Feb. 22 told banks to set the risk weighting for new residential mortgages at a minimum of 15 percent to ensure lenders’ capital cushions are deep enough. The measure will raise the home loan funding cost at Standard Chartered by 20 to 25 basis points, Hung said today.
“The new measure has led to higher costs for banks’ new mortgage business,” Hung told reporters in Hong Kong today. “The higher funding cost will inevitably be passed on. It’s just a matter of time.”
Since taking office in July, Hong Kong Chief Executive Leung Chun-ying has added property taxes, favored local permanent residents over foreigners, tightened mortgage rules and increased supply after home prices doubled in the past four years. Standard Chartered ranked fourth in the city’s home loan market last month with a 13 percent share, according to Hong Kong-based mReferral Mortgage Brokerage Services.
Growth in the bank’s Hong Kong mortgage loan book may slow to less than 10 percent this year, Mary Huen, head of consumer banking for Hong Kong, said today. Residential mortgages at the Hong Kong unit grew 11 percent last year to $21.4 billion. The lender assigned a risk weighting of less than 10 percent to home loans before the recent rule change, Huen said.
In addition to the risk-weighting floor on home loans, Hong Kong doubled the sales tax on property costing more than HK$2 million and tightened the stress-test requirement on mortgage applicants as it continues trying to cool the real estate market, Financial Secretary John Tsang and Hong Kong Monetary Authority Chief Executive Norman Chan said on Feb. 22.
Bubble Risk
The latest curbs have slowed down the property market, Nixon Chan, head of retail banking and wealth management at Hang Seng Bank Ltd. (11), said this week. The risk of a property market bubble has increased even after the government on Oct. 26 introduced new taxes targeted at non-local home buyers and increased a resale tax on residential transactions.
The value of new residential mortgage loans drawn in Hong Kong declined 16 percent to HK$15.9 billion in January, the second monthly drop after an 11 percent decrease in December, monetary authority figures show.
To contact the reporter on this story: Stephanie Tong in Hong Kong at [email protected]
Junior
http://www.cnbc.com/id/100532907
China's 'Ghost Cities' Warn of Property Bubble: Chanos
Published: Thursday, 7 Mar 2013 | 11:08 AM ET
By: Matthew J. Belvedere
Producer, CNBC's "Squawk Box"
Avoid investments that rely on the Chinese real estate market because the bubble there is getting "bigger, and bigger, and bigger," hedge fund manager Jim Chanos told CNBC on Thursday.
"Anything that's depending on the Chinese economic miracle I would be careful of," Chanos said in a "Squawk Box" interview.
(Read More: Why China's Property Market Is Getting Scary)
The founder of Kynikos Associates, said it was "somewhat controversial" when he started to warn about real estate in China three years ago. But he added, "[the] property bubble is visual. You can't miss it [now]."
He was referring to the growing problem of so-called "ghost cities" there, which were the subject of a "60 Minutes" investigation this past weekend.Correspondent Lesley Stahl reported, "We discovered that the most populated nation on Earth is building houses, districts and cities with no one in them … desolate condos and vacant subdivisions uninhabited for miles and miles and miles and miles."That's because construction accounts for about half of China's $8 trillion economy, Chanos estimated and pointed out that while gross domestic product there slowed to a still fairly robust growth rate of 7.8 percent last year, "corporate profitability there imploded."
He argued, "It's the nature of the [economic] growth. If it's all sticking a shovel in the ground, you get whatever you want."
"But at the end of the day, what's sustainable?" he asked. "Because, as I keep pointing out, every time you finish a building [there], under this model, you have to put up another one."
Comparing the potential Chinese real estate bubble to the one that burst in the U.S. in 2008, Chanos said, "Unlike our buyers who walked away and left it to the banking system and the Fed to sort of bailout. These people are going to lose their life savings. And that could be a big issue in China."
He said he analyzed Chinese government figures and concluded that China is on pace to develop about twice as much in the coming years as it had built in the past three.
"Avoid anything having to do with the Chinese property market — steel, cement, iron ore," he advised investors, saying that he's been shorting these sort of plays.
—By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC
Posting Permissions
Reply With Quote