Measures meant to curb the rise of Hong Kong's property prices may be hitting the sales of big projects.
The government had imposed stricter measures such as additional taxes and higher down payments at the end of 2010 after the IMF warned that asset inflation may adversely affect the city's economy. Property prices had risen more than 50% since the start of 2009. Record low mortgages and an influx of Chinese buyers with "hot money" also helped raise home values, especially in the luxury sector.
Since the measures were introduced, property prices have dropped 3%-5%, except in the high-end market, where prices have remained steady.
The financial services firm JPMorgan Chase & Co. believes that residential property values-to-GDP may reach 3.5 this year, based on its forecast that house prices will go up 15%. The ratio, if it is reached, will exceed the peak of 3.13 it had previously hit in 1997.