Hong Kong property market under close watch

The government tries to ensure stable and healthy development of the property market, which is at risk of a property bubble with low interest-rates and a capital overflow.

Chief Executive Donald Tsang has reiterated the Government will closely monitor the property market, and introduce more measures when necessary to maintain the city’s economic and financial stability, according to a government report.

He told lawmakers on Thursday it is the Government’s policy objective to ensure stable and healthy development of the property market. Facing low interest-rates and a capital overflow, it will remain vigilant against the possible risk of a property bubble.

Despite a drop in short-term speculative activities in the past six months, continuous increases were seen in flat prices. The Government will ensure sufficient land supply and adopt a more active approach to initiate more land sales.

Understanding public grievances triggered by housing hikes, he said the My Home Purchase Plan and other measures will help stabilise the market in a more comprehensive manner and help people buy flats.

When asked if the Government will resume construction of Home Ownership Scheme flats, he said the issue involves the supply and use of land, adding the My Home Purchase Plan is a more effective way to increase flat supply. He said he will deal with the issue in his next Policy Address.

Expecting the quantitative easing measures of many countries to end soon, he advised the public to carefully assess affordability when purchasing homes because interest rates may rise.