HK's stricter mortgage rules may affect sales of older homes
But analysts say QE3 launch could see prices edging up despite government measures
The Hong Kong Monetary Authority's move to tighten requirements for second mortgages is expected to slow sales of older homes but is unlikely to trigger a significant price correction, according to property agents.
Midland Realty expects the number of transactions in the secondary residential market could tumble by 11 per cent to 16,000 in the fourth quarter.
The latest mortgage lending policy would deter buying interest from investors with limited budgets while plans by developers to speed up new property launches would lure buyers away from previously owned flats.
"Home prices however will edge up 3 to 5 per cent as the third round of quantitative easing measures in the United States prompts inflation," said Buggle Lau Ka-fai, chief analyst at Midland Realty.
"It will lure capital flow into the property market as a way to hedge rising inflation."
Some flats are continuing to sell at record prices.
Yesterday, a 585 square foot flat in Taikoo Shing in Quarry Bay, one of the most popular residential developments, sold for HK$5.78 million, or HK$9,880 per sq ft.