HK curbs home loans to prevent bubble after Fed stimulus
HONG KONG (REUTERS) - Hong Kong's de facto central bank has ordered banks to curb home loans to borrowers with more than one mortgage to prevent the city being flooded with hot money after the United States (US) announced an aggressive new stimulus plan to spur growth.
The former British territory has among the most expensive residential property prices in the world, driven higher in recent years by voracious demand from rich buyers from mainland China.
But the runaway real estate market has created festering social and political problems, and forced the Hong Kong Monetary Authority (HKMA) into uncharacteristic action in a territory known for its open economy.
In another step taken on Friday, the HKMA said it would restrict the maximum length of a mortgage to 30 years. Some banks had been offering home loans of up to 40 years.