“The U.S. Federal Reserve’s expansion of stimulus will add to the risk of a housing bubble in Hong Kong and may force extra measures to cool prices…”

“The Hong Kong Monetary Authority will take measures that are specific to the housing market if necessary…The risk of an asset bubble in Hong Kong’s property market is rising.”

It must seem odd to monetary authorities on this side of the Pacific that a central bank is trying to get ahead of a property bubble and not just plan for clean-up duty after it bursts. Since August, Hong Kong’s authorities have “…raised down-payment ratios, stopped offering residency to foreigners who buy property in the city, and increased land auctions to boost supply.” Despite these measures, sales of news homes still doubled in October.

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“Hong Kong’s government is “very concerned” about the risk of an asset bubble developing although a bubble is not apparent yet, Financial Secretary John Tsang told legislators on Monday…

…Residential property prices have jumped 30 per cent this year, and price gains for luxury property have topped 40 per cent, as the city has drawn massive capital inflows – amounting to a record $US73 billion between October last year and November 13 this year – with foreign investors attracted by its low interest rates. Wealthy mainland Chinese have also been snapping up luxury Hong Kong apartments.”

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