Property curbs will not be relaxed: Chan

It is too early to relax property curbs, as the risks of an asset bubble linger, the government says.

The measures have achieved their purpose, but the curbs will stay in place, said Chan Ka-keung, the Secretary for Financial Services and the Treasury.

"It's still too early to make any changes because the risks of an asset bubble remain," Chan said. "The US is yet to confirm when it will end its monetary stimulus policy, which would depend on the economic and employment figures. This means the global markets face volatilities ahead and our investment markets are in for a roller-coaster ride.

"We are still in a low-interest-rate environment and many portfolio funds are sloshing about in the Asian and Hong Kong investment and property markets. This is why the government still needs to keep the property curbs in place."

The US Federal Reserve last week hinted at tapering its monetary stimulus, but Chan said he did not read Fed chairman Ben Bernanke's statement that way. Bernanke, Chan said, provided no clues on when the quantitative easing programme, known as QE3, would end. "If the economic and unemployment figures in the following months are bad, Bernanke may allow the QE to continue," Chan said.

In the three rounds of QE since the financial crisis in 2008, the US government has aggressively pumped cash into the economy and kept interest rates low as a way of encouraging investment and spending to boost the economy.

Chan said that while these programmes help the US economy, they have a negative side effect in places such as Hong Kong, as the excess funds unleashed by QEs end up as speculative money betting on stocks and property in other markets.