Second policy warning unleashed to cool property market

A 6th package of measures may be rolled out.

According to Nomura, after the Financial Secretary’s warning in the previous week that the Government could launch more cooling measures when necessary, the second policy warning was released. 

HKMA’s Chief Executive told reporters that the HKMA can roll out a sixth package of measures if necessary to rein-in the property market.

Here's more from Nomura:

He warned that elevated household debt adds to the risks from property price gains over the past four years. With this second warning about potential cooling measures, we believe that there is no place for complacency about policy risks.

 Physical market: Home prices continued the uptrend with 0.6% w-w gain. At 119.13, the YTD gain is now 2.9%. Developers’ primary projects continued the good take-ups with 210 units cleared over the weekend, while the Midland 35 housing estates index fell 8% to 162 transactions.

 Best and worst: HK property stocks dropped by 1.7% last week, underperforming the HS Index (+0.6% w-w) and their Chinese peers (+0.4% w-w).

 Buyback/stake changes: There were no share buybacks or stake increases noted last week.

 FY12-14F consensus earnings estimates: Developers (-0.3%/+0.3%/ +2.5% w-w), landlords (+0.1%/0.0%/0.0% w-w) and REITs (0.0%/0.0%/-0.2% w-w).