HK property measures hit mainland investors

Weekend sales of used homes in Hong Kong dropped 83% compared with the previous week according to some property companies, Bloomberg reported. On Friday Hong Kong’s government introduced tougher-than-expected new measures to curb property speculation in the city, including a 15% stamp duty on homes sold within six months of purchase, a 40% down payment requirement for properties worth between US$1 million and US$1.5 million, and a 50% down payment requirement for properties worth US$1.5 million or more. The measures were meant to curb mainland Chinese property speculators, who are being blamed for driving prices up 30% in 2009 and 15% in the first nine months of this year. Last month Hong Kong also suspended a rule, used primarily by mainland Chinese investors, which allows foreigners to become residents if they invest US$838,000 or more in local assets.