Residential property sales plunged 58% in June

The Hong Kong government implemented additional cooling measures in June 2011. Buyers of homes that cost more than HK$7 million but less than HK$10 million can now only apply for a maximum loan-to-value ratio of 60%, subject to a cap of HK$5 million. For properties worth HK$10 million or above, the maximum loan-to-value ratio is 50%. Since these measures, sales at ten of Hong Kong’s biggest residential developments fell 58% over a weekend.

Property transactions fell for a fifth straight month in May, but homes prices still increased by 1.3% in early June, according to Centaline.

Home prices have risen 11% so far this this year, according to government estimates. With the measures, we expect price growth to slow down to a stable and robust level over the rest of 2011.