Posted on 12 February, 2018 | By Property852
According to a poll conducted by Hong Kong Institute of Asia-Pacific Studies, there has been an increase in the number of people who do not support the new regulations in the real estate industry. As of 2016, the number of people in Hong Kong with negative, positive and undecided views on the prices of houses was equal. Leung Chun-ying (who became Chief Executive of Hong Kong in the year 2012) aimed at reducing the price of housing. To do so he imposed taxes to discourage investment so that demand and supply in the real estate industry would reduce. This did not work as he expected and the price of apartments rose to about 60%higher than before.
After the imposed taxes in 2013, a poll was carried out in Hong Kong and the number of people who did not support the measures were noted to have risen. As the gap continued to widen the prices of houses went down briefly, rising the hopes for better bargains in the real estate industry. This was however short lived because of the imposed double stamp duty. This ensured that all home owners were required to pay double the mortgage price. The regulations also prevented new buyers in Hong Kong from buying in the secondary market. This led them to turn to the primary market where the developers were offering finance. This helped to bring a rebound to the prices of houses of about 7%. A poll conducted showed that more people were positive about the progress. In the year 2015, there was a disagreement between banks and the government. The government warned buyers about the negative mortgage with rising interest rates. The banks on the other hand were hesitant to put high rates even with the fluctuating prices of houses in the market. This led to confusion among the population whose views shifted with many of them expecting that the prices of houses was going to drop.
The monetary normalization which started in the year 2015 led to increased rates for houses but prices remained the same. The introduction of the stamp duty by a large margin of 15% led people to become skeptical of the methods being used. The methods are aimed at strangling the secondary market and reducing the rate of investment in the real estate industry. The government’s overregulation of the industry has led people to mistrust it and it has also reduced the investments in the industry. The lending rates of banks are significantly lower compared to the normal rates by around 20%. Statistics have shown that people who have owned homes for more than 5 years have already paid off the rest of their debts. Some of the owners who have less than 5 years in their homes have also completed their mortgage.
Regulatory methods and the imposing of stringent rules in the real estate industry has had negative effects on the industry. The people no longer trust the means used by the government on the industry. Giving back the industry to be run by private investors may be a smart move to return the people’s trust and develop the industry.