Hong Kong Suspends Property From Residency Plan

Bloomberg News

Oct. 13 (Bloomberg) -- Hong Kong’s government will suspend investment property as a criteria to gain residency in the city and will introduce a rent-to-buy housing plan as it tries to cool the property market. Shares in developers tumbled.

The government will temporarily remove real estate from its Capital Investment Entrant Scheme, which was set up to encourage foreigners to invest in the city to gain residency, Chief Executive Donald Tsang said in his annual policy address today.

The government has in the past year announced a series of measures to rein in home prices that have surged almost 50 percent since the beginning of 2009 on the back of record-low mortgage rates and an influx of mainland Chinese buyers. The last round of measures, unveiled on Aug. 13, included raising down-payment requirements on mortgages for luxury and investment properties, and a pledge to increase land supply.

The Hong Kong Property Index, which tracks the city’s seven biggest developers, fell as much as 3.4 percent and was down 2.5 percent at 12:09 p.m., reversing an earlier gain.

The government will also continue to boost land supply and expects 61,000 new units to come onto the market in the next three to four years, Tsang said.