Analysis | Hong Kong government lacks creative ideas to tackle soaring home prices

Strong sales at new residential projects over the past holiday weekend have shown that the market wants creative housing plans such as the “starter home scheme” instead of verbal warnings from top officials when it comes to tackling soaring home prices.

A total of 440 new flats were sold over the three-day holiday despite the government’s housing price index hitting an all-time high, in defiance of Hong Kong Monetary Authority chairman Norman Chan Tak-lam’s warning on Saturday that it was “very irrational” to enter the market based on expectations that home prices would never go down.

Statistics from the Rating and Valuation Department showed that home prices reached a record high in August after 17 consecutive months of increases.

The situation is putting further pressure on Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor’s attempts to bring housing prices under control.

Chan’s warning came a day after the latest half-yearly monetary and financial stability report from the city’s de facto central bank, which highlighted the growing trend of young homebuyers relying on help from their parents. That support even went so far as parents taking out mortgages on the family’s main residence to help fund flat purchases by the children, the authority said.