Home prices in Hong Kong have surpassed their 1997 peak according to data released by the Hong Kong Monetary Authority (HKMA), causing further fears of a housing bubble.
The average price for a home of about 100 sq m is 13.8 per cent more than in the third quarter of 1997, before the massive Asian economic crisis.
Some experts have gone so far as to say the housing bubble has already begun, the Telegraph newspaper reported. “The government is struggling to find an effective policy response to rising prices. Limited new supply of housing, low interest rates and increasing numbers of mainland buyers are all helping to push values to record highs. It looks like this is something we will have to live with for the time being,” said Simon Smith, head of research and consultancy at Savills, Hong Kong.
Earlier this month, the city’s chief executive Donald Tsang introduced property market cooling measures, including halting automatic residency for wealthy property buyers, many of whom come from mainland China.
The 1997 Asian crisis began when the Thai baht collapsed less than 24 hours after the UK ceded control of Hong Kong to China, leading to a chain reaction of economic problems in the continent. House prices in Hong Kong deceased 60 per cent during crisis, but since 2003 they have been steadily increasing. The average home price in Hong Kong has increased by 45 per cent over the last two year, the Telegraph reported.
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