HKMC launches new Premium Loan Guarantee Scheme

It's to address public housing flats turnover.

It has been noted that the Hong Kong Mortgage Corporation (HKMC) will launch a new Premium Loan Guarantee Scheme.

According to a research note from Barclays, it's in order to increase the turnover of pupblic housing flats.

Further, the report noted that the new scheme will be launched to help owners of subsidised sale flats pay the premium to the Hong Kong Housing Authority and Housing Society.

After settling the premium payment, owners would have greater flexibility in disposing of their flats, such as letting out or selling the flats in the open market.

Here's more from Barclays:

No new property cooling measures for now – As expected, the Budget Speech recognized the double digit price increase in small/medium sized flats but it did not contain any new cooling measures. Instead the Government warned the public to be extra cautious in home buying decisions and reiterated that the Government will continue to monitor market conditions and may launch new measures when necessary.

Bringing up the 2006 GST public consultation – Like last year, the 2015-16 Budget emphasized the importance to stabilize and broaden Hong Kong’s tax base. What’s new however is a reference to Government’s previous 2006 consultation on the introduction of a Goods and Service Tax (GST). Although the Budget Speech recognized that the community did not support the new tax then, it highlighted that it may “explore again the feasibility of broadening the tax base in due course”.

Future Fund to be in place this year – On the establishment of the Future Fund to serve as long-term savings and be placed in long-term investments. The Budget highlighted that the Secretary for Financial Services and the Treasury will work with the HKMA to hammer out a specific management and investment mechanism with the savings scheme expected to be in place within this year.

Relief measures more generous than last year – Compared to last year, this year’s Budget contained more generous relief measures. In addition to some targeted relief measures to counter the disruption from last year’s Occupy movement, the Government also continued to provide six other relief measures. In aggregate, the total amount of these relief measures has been increased from HK$20bn to HK$34bn with fiscal stimulus effect increased from 0.7% to 1.0%.