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Following is the transcript of remarks by the Secretary for Development, Mr Paul Chan, at a media session after attending a radio programme today (February 28):
Reporter: Regarding the tightening of the loan-to-value ratio, my understanding is that it may slow down the increase of property prices so that it may make it any easier for Hong Kong people to buy flats, ... actually it might make it even more difficult for some of the Hong Kong people to buy flats, so what's the point of it?
Secretary for Development: The new measures introduced by the HKMA (Hong Kong Monetary Authority) indeed will affect the first-time home buyers, but on the other hand, it is an opportunity to cool down the market a little bit to enable people to take a more comprehensive look of the demand and supply situation, as well as their own affordability. In the past year or so, we observe that the rise in price of smaller properties, to a certain extent, has been affected by the financing model. For small properties with a value of 4 million dollars or below, buyers can get about 70 per cent of bank financing, and another 20 per cent through mortgage insurance. In such case, for those who are eager or even panic to own their flats, they may go into a situation to buy smaller flats with exceptionally high price, which eventually, if the market turns around, or the market situations change, they will be adversely affected.
As you may know, the supply situation is getting better. In the coming three to four years, the supply situation will be a lot better than that in the past few years. Hopefully by that time there will be more choices for home buyers.
(Please also refer to the Chinese portion of the transcript.)
Ends/Saturday, February 28, 2015
Issued at HKT 12:59
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