Any additional action by the Hong Kong government to cool the housing price gains is a risk-demand media between "real buyers" and speculators, a senior executive of HSBC Holdings Plc said.
Government of Hong Kong on November 19 announced additional stamp duties on property holdings in the short term and a higher initial payment of some mortgages, stepping up measures to curb speculation when housing prices rose more than 50 percent since the beginning of 2009.
"What we want to be so careful that any additional restrictions would definitely affect the real buyer, the person who wants to live in that house," said Mark McCombe, chief executive of HSBC's Hong Kong unit, in an interview. "Hong Kong is important not to lose sight of the property to be an important engine of the economy.
Hong Kong Chief Executive Donald Tsang, said the latest measures were announced that the government was aimed at "speculative activity" and the curbs of the "will not affect users." On November 26, Tsang said he is willing to take further action if necessary to curb price increases.
McCombe said he supports the measures taken so far, including a duty of 15 per cent of stamp duty on homes sold within six months of purchase. "That was a good move, because it takes a bit out of the foam market," he said.
In the first weekend after they had been adopted, sales of existing homes in some of the largest in Hong Kong private housing fell 83 percent from the previous week, according to Centaline Property Agency Ltd. Sales have stabilized since then, Centaline said.
High prices
The real estate market rebound of the global financial crisis was driven by falling interest rates, an expanding economy and an influx of buyers from mainland China. The banks were quick to undermine each other in mortgage costs, and competing to block new customers and sell additional financial services.
HSBC is Hong Kong's largest provider of mortgages, which account for 19 percent of all home loans in the city in the first 11 months of this year, according to Centaline.
McCombe said that while there are signs the market has recovered, it is too early to judge the impact of the curbs last property on account of Christmas and Chinese New Year holiday season.
"What interests me is what the behavior is February to April," he said. "I think give us a better idea of whether or not it had any real impact on the market cooling."
The top five mortgage lenders in Hong Kong - HSBC, BOC Hong Kong (Holdings) Ltd., Hang Seng Bank Ltd., Standard Chartered Plc and Bank of East Asia Ltd. - last month increased the cost of mortgage loans linked to the Hong Kong Interbank Offered Rate, after margins hurt mortgage competition.
"I'm not going to be some sort of price war in 2011," McCombe said. "The aggressive price competition is unlikely in the short term. But it is very difficult to predict how other banks will behave."
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