Hong Kong Taxing Homebuyers in Bubble Fight: Mortgages
The Hong Kong government’s toughest efforts yet to curb a growing asset bubble in the city’s property market probably won’t be the last as record-low mortgage rates drive demand for the world’s priciest homes, Bloomberg reported. Policy makers last month imposed an extra 15 percent tax on all home purchases by companies and non-permanent residents, adding to steps to boost the supply of housing and tighten lending as an influx of buyers from other parts of China underpin soaring prices. Untouched is the major stimulant fuelling prices: borrowing costs tied to the U.S. because of the Hong Kong dollar peg and growth linked to China. Pledges by Hong Kong Chief Executive Leung Chun-ying and his predecessor to rein in the property market have so far done little to stem a three-year surge that almost doubled prices in the city with Asia’s biggest wealth gap. Leung has imposed three rounds of curbs, including accelerating new home sale approvals and tightening banks’ mortgage lending, since taking over in July. His government in the past week has signaled it won’t rule out additional measures. Read more.