Hong Kong to ease property cooling measures amid falling prices? Finance chief Paul Chan offers strongest hint yet

The government gave its strongest hint yet that it could soon ease Hong Kong’s property cooling measures as Financial Secretary Paul Chan Mo-po said on Wednesday the conditions that prompted authorities to impose such moves more than a decade ago no longer prevailed today.

Meeting the press after a 10-day trip to Europe, Chan was asked whether authorities would relax the cooling measures for the property market amid falling house prices.

“We see that the current property market situation is different from that when we introduced the management measures,” he said.

“After all, different management measures have their goals and purposes in different scenarios. We will adopt a pragmatic attitude and continue our reviews.”

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In July, the government relaxed mortgage rules for some homes to make them more affordable for first-time buyers and for owners to trade, in its first easing of curbs since 2009.

Despite this, the continuous increase in interest rates prompted banks to raise mortgage rates, which left home prices drifting lower and hurt demand.

HSBC last week forecast home prices would drop by 5 per cent in the first half of next year before stabilising in the second half.

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Chan said that when the government first rolled out the cooling measures from 2010, there was tighter supply in the housing market and a need to curb demand for property speculation and investments.

“We have noticed that property prices dropped by around 15 per cent last year and bounced back by around 2 per cent by the end of this July,” he said.

Property consultancy firm JLL said on Wednesday that the year-to-date gain in home prices would be offset by the end of September by the recent decline, and that it forecast cases of residential loans in negative equity would exceed 10,000 by the end of the month.

Chan returned home on Wednesday after touring Europe at the head of a 130-strong trade delegation, the largest to depart the city since the Covid-19 pandemic struck in 2020.

His 10-day trip included stopovers in France, Britain and Germany as part of a wider drive to promote Hong Kong as a top business destination following a period of political tensions.

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Chan announced last Saturday while travelling in London that leading global pharmaceutical firm AstraZeneca planned to set up a research and development centre in Hong Kong.

At his first port of call in Paris, the minister also spoke with local government officials and business leaders from sectors such as life and health technology, as well as the cultural and creative sectors.

More to follow…