HONG KONG: Developers may put the sale of new projects on hold to gauge market sentiment after the announcement last week of new measures to curb speculation in the property market, some agents say.

Others, though, say the measures may speed up the release for sale of new flats.

Last Friday, the Hong Kong Monetary Authority cut the maximum loan-to-value ratio for homes worth more than HK$10 million (RM3.89 million) by 10 percentage points, to 50%, and that for homes worth HK$7 million to HK$10 million from 70% to 60%, and set the maximum ratio for non-resident borrowers at least 10 percentage points lower.

Simultaneously, the government said it would increase land supply  by selling eight plots for residential projects between July and September.

"I don't think any developer will launch new projects in the short term now," said Louis Chan Wing-kit, managing director for residential sales at Centaline Property Agency. "They will wait and see how the market situation develops and postpone the release of their new projects temporarily."

That view appeared to be confirmed by the immediate reaction to the news of some developers.

Property agents said Hang Lung Properties met them last Friday morning ahead of the announcements, to advise them that the price list for remaining flats at its project The Long Beach in Tai Kok Tsui, West Kowloon, would be released and the project launched for sale shortly. However, subsequently it did not update its sales plans. On Monday Eric Szeto Wing-hong, senior manager of project development, denied the company had planned to launch the project shortly.

"It was just a regular meeting with property agents. We haven't decided when to launch the project," he said.

Nicole Wong, regional head of property research at CLSA, said the new curbs might speed up the release of new projects since the government planned an increase in land supply.

"That will mean housing supply will increase in the next few years. Developers will try to get cash flow now by selling new projects as soon as possible in order to replenish their land banks. They will not postpone the sales of luxury residential projects in traditional luxury living areas."

However, she said the luxury market would not be affected by the increase in housing supply.

On the outlook for the mass market, Wong believes prices will now rise more slowly.

"The release of the new measures confirms only two situations will follow. Price growth will decelerate, or the government will release further new cooling measures again. It is their objective."

Growth in prices in the mass residential market remains high, but has begun to slow.

After surging by 18% last year, prices are up a further 14% so far this year.

"We expect price will grow 15% this year and by 5% in 2012. If we count the inflation factor in, that means in real terms property prices will actually fall next year," Wong said. — SCMP

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