Hong Kong planning new anti-speculation measures
November 15, 2010 - Hong Kong
Hong Kong chief executive Donald Tsang said that the Special Administrative Region's government will take legislative and administrative steps against speculation in the housing market, Bloomberg Businessweek has reported.
Developing Asian economies are attracting huge inflows of cash, which is increasing inflationary pressure on asset and consumer prices, Tsang said at the Foreign Correspondents' Club of Japan in Tokyo on Saturday.
Tsang did not however reveal anything about what types of measures the government will take or the timing of them.
"The measures must remain secret until they are released, otherwise they become ineffective," Tsang said.
"I'm not discouraging the healthy movement of the property market. As the market grows here, definitely property prices will grow gradually, along with the economy.
But if it's moving out of kilter with the economy then something must be done, particularly if that growth is generated by speculative activities."
Powered by a recovering economy, interest rates at their lowest in 20 years, and a flood of newly wealthy Mainland Chinese buyers, home prices in Hong Kong have doubled since 2003.
The Hong Kong government has already tried to cool the market to little avail with measures like raising down-payment requirements, increasing land supply, and increasing stamp duties on some luxury properties.
The city's residential property prices will likely gain 30 percent from now until the end of 2011 because a weaker dollar will boost asset inflation, Cusson Leung and Joyce Kwock, Hong Kong-based analysts at Credit Suisse Group AG, wrote in a note to clients this week.
On Nov. 4, Hong Kong Monetary Authority head Norman Chan warned that the U.S. Federal Reserve's expansion of stimulus will increase the risk of a housing bubble in Hong Kong.
Via Property Report
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