Concerned about the property market disorder adjustment chain reaction loss of economy
Hong Kong Wen Wei Po (Reporter Yan Lun Le) The International Monetary Fund (IMF) made a preliminary assessment of its visit to Hong Kong yesterday. Although it forecasts that the economic growth in Hong Kong will be 3.5% and 2.5% this year and next, it will also benefit from the "One Belt and One Road" and "Grand Bay District "and other opportunities. However, the overall risks from the periphery and the local economy are still giving the economy a downward bias. In the future, Hong Kong will mainly face the four major risks. Among them, the risk of overvaluation of property prices will come first. It believes that once the property market adjustment is out of order, it may trigger a vicious cycle between property prices, solvency and consumer spending, leading to economic growth Slow down, the bank balance sheet will be affected.
According to the IMF report, property prices have risen by overvalued this year, up 15% (as of September) despite a series of measures introduced by the government under the imbalance of supply and demand in the market. In addition, given that a considerable portion of new mortgage loans adopt a floating-rate system and based on HIBOR, the sensitivity of the family contribution burden to interest rate changes remains high. Once the property market is adjusted for disorder, the negative wealth effect may cause personal consumption A major blow.
Yesterday, Hong Kong's one-month HIBOR climbed 1% for the first time since 2008, with some in the banking industry expecting the pressure on Hong Kong banks to raise the prime rate (P) as fast as the first quarter of next year. (See another draft)
High taxes reduce the liquidity of the property market
The IMF believes that the three-pronged approach taken by the Hong Kong government can effectively curb the hot property market, including increasing the supply of housing and enhancing the financial system's ability to cope with risks. It has introduced two spicy measures (buyer's stamp duty and double ad valorem stamp duty) . However, they also pointed out that high taxation may reduce the liquidity of the property market. In the future, once the systemic risk is weakened, the authorities should gradually eliminate two itemsStamp duty and replace it with other measures that do not distinguish between residents and non-residents.
IMF analysis, continue to increase housing supply is the key to solving the structural imbalance between supply and demand. However, in the face of various obstacles to further supply increase in the short term, including the lack of land available for immediate housing and the related development restrictions, it may be difficult to achieve the target of 10-year housing supply under the Long Term Housing Strategy. Therefore, the Administration should speed up the process of identifying land for development and projects on land and conducting relevant environmental, traffic and community facilities assessments.
Long-term housing policy standards have difficulty
Macro-prudential measures effectively create buffer space for the financial system and raise banks' standards for approving mortgages, which the IMF believes will be maintained. However, it pointed out that loans provided by property developers who obtain financing from banks to homebuyers are rapidly growing, though at a relatively low level compared with the bank's overall mortgage loan balance. However, the IMF believes that authorities should consider macro-prudential measures in the light of changes in the future financial stability risks.
As for the hot spikes mentioned above in the two property launches, the IMF considers the measures appropriate but believes that the further tightening of the measures may exacerbate the outflow of risks to non-bank financial institutions and real estate developers that are not under its supervision. In addition, the Administration may also phase out the tax deduction on mortgage loan interest rates as the relevant measures stimulate housing demand and encourage more lending.
Be alert to European and American currency inland adjustment
Apart from the property market risks, the risk to the second future is that the global financial conditions are tighter than expected. If the market volatility aggravates as a result of unexpected monetary policies in the United States or the euro zone, the financial conditions may be tighter than expected . Given Hong Kong's financial industry is closely linked with the world, once the global financial conditions are tightened than expected, it may curb Hong Kong's local demand and bring financial pressure.
The third risk comes from the possible adjustment disorder in the Mainland, which will hit the tourism, trading and logistics industries which account for more than one quarter of Hong Kong's GDP and employed population. The deepening financial ties with the Mainland have benefited Hong Kong, but at the same time, new channels of transmission have also been formed to absorb the spillover effects of financial turmoil and spillover effects. These include the high and rising banking system and the Mainland-related risks (the current assessment is still controllable Level).
The fourth risk is the retrogression of cross-border integration, and the risks of many advanced economies turning to inward closure policies including protectionism are on the rise. These policy shifts will reduce cross-border trade, investment and labor flows, possibly deterring productivity and global growth. As a highly open economy, Hong Kong will be adversely affected.