But our bureaucrats believe they must do something, anything, and they have thus resorted to their usual tactic in such cases - treating the symptoms. The trouble is that they could easily make things worse, not better with some of their measures.

Let me introduce you to the underlying reason for steep property prices - government itself.

In this case, I blame our own government only insofar as that its monetary negligence 30 years ago forced it to adopt a peg to the US dollar. From that point onwards, I can blame the US Federal Reserve Board for pushing interest rates down too far, particularly under Alan Greenspan, who always took the side of the borrowers against the depositors.

Greenspan might say in his own defence, of course, that low inflation rates gave him a perfectly good reason to maintain low interest rates and it is perfectly true if one looks only at the consumer price index.

But we have a new phenomenon here. Inflation has worked its way into the financial markets rather than the consumer market alone. It is a phenomenon now seen all over the world and in many classes of financial asset but most notably in the property market.

And there is nothing we can do about it. The Fed is in control of our interest rates through our peg to the greenback. As long as interest rates stay abnormally low, our property prices will be pushed up. Scream about it as we may, our government cannot make things better for us.

It can make things worse, however, by such measures as banning confirmor transactions of uncompleted new flats - resales before a transaction is completed.

Doing this is like pouring sand into the wheels of the development process. Developers need an active presales market, as they have a great deal of money at risk in big projects. But many potential buyers will shun the presales market if their own rights to sell these flats are restricted.

This only introduces financial uncertainty to the business. It becomes harder for developers to turn their money around for new projects and thus slows down the rate of construction of new flats.

Yet this is precisely the first measure our government announced over the weekend, purportedly to discourage speculators, a perfect example of addressing symptoms only. The liquidity that speculation brings to fevered markets does more to pull prices down than push them further up. Our government has the wrong culprit again.

But here is a bet that the auction of two Kowloon sites today will bring lower prices than earlier expected, which will make the bureaucrats say that their measures are working and property prices are starting to come down.

What it will actually mean is that the market has become more inefficient and developers have therefore bid lower prices to compensate themselves for the risks to their eventual profits. The prices that homebuyers eventually pay for the flats on these sites will not be affected.

And higher prices do not necessarily make homes more unaffordable anyway. The chart shows you Centaline's affordability index for private homes, an estimate of how much of household income of a mortgaged flat is spent on servicing the mortgage at current prices.

The latest figure is 39.5 per cent, still well below the peak of 1997 despite the fact that prices have risen to or past 1997 levels. There you have the effect of low interest rates. They push total housing costs down with the result that the more easily movable element of housing costs, property prices, go up.

That's a problem if you don't already have a mortgage and need to pull together a down payment. But our government now wants you to make bigger down payments, not smaller ones.

The more they try to make things better, the more they make them worse.