Government property curbs make sense

Swire Properties Ltd also said resale home prices will probably fall.

The luxury property developer said more price hikes will place Hong Kong at a competitive disadvantage. Chairman James Hughes-Hallett said restrictions on property ownership taken by Chief Executive Leung Chun-ying make sense in this regard.

Hughes-Hallett believes resale home prices will probably fall but it's too early to measure the impact of the curbs on new properties. Deutsche Bank AG forecasts property prices could drop by some 20% over the next two years after lenders in March raised home-loan rates by 25 basis points in response to tighter risk rules.

A shortage of housing supply, low mortgage costs and a buying spree by mainland Chinese have seen home prices defeat repeated attempts by the government to curb gains amid a rising public outcry over affordability.

“We’re at the very top of the market for our global comparison,” Hughes-Hallett said. “If you look at the price equivalent you pay in New York, Paris, London, Tokyo, there should be a price ceiling somewhere very soon.”

Leung has imposed extra property transactions taxes, raised mortgage down-payment requirements, and accelerated the pace of government land sale.