Financial Secretary Paul Chan on Thursday said the government had taken into consideration factors like property prices, the supply of housing and the city's economy, before it reduced the down payment needed to buy a flat. As announced in the chief executive's Policy Address yesterday, the maximum loan-to-value ratio for residential properties would be adjusted to 70 percent, regardless of their value, whether the properties were for self-use or not, or were being purchased by first-time buyers. Chan said property prices had come down and there would be sufficient housing supply, with over 108,000 first-hand units available in the next three to four years. "We should let the market forces play. We should not unduly impose measures to suppress the demand, or try to prioritise different demands. Also, taking into consideration, at the moment, our banking sector is very healthy, very well-capitalised. The [number of] negative equity cases compared to 1998, for example, is much lower," he said. "We do feel confident to remove those restrictions so that we would be able to project a more positive expectation... about the healthy and stable development of the Hong Kong property market in the coming future." Chan added that government revenue from land sales and stamp duties was lower than expectations, but it was too early to revise estimates on the fiscal deficit for the financial year. He expects Hong Kong to record further growth for the remainder of the year, with the start of the US Federal Reserve interest rate easing cycle giving the economy an added boost.
