Hong Kong housing

Housing chief Anthony Cheung warns of risk of property bubble

Secretary for housing warns people not to rush into buying flats as the risk of a bubble is rising, and he promises to study needs of young

PUBLISHED : Sunday, 14 October, 2012, 12:00am
UPDATED : Tuesday, 22 September, 2015, 4:52pm

Housing chief Anthony Cheung Bing-leung has warned people not to rush into buying flats, saying Hong Kong's property market is in a "strange and worrying" state.

Cheung, the secretary for transport and housing, said it was unusual for property prices to keep rising while the economy was not booming, and he warned that the risk of a bubble was increasing.

"Property prices are rising consistently, while our economic performance remains fragile, so from an economic point of view many academics are warning about an increasing risk of a bubble,'' Cheung told RTHK yesterday.

Data released by the Rating and Valuation Department showed the overall price index of private flats hit its highest point, 210.6, in August, a 2.1 per cent increase on July.

Responding to an RTHK caller who accused the government of not seeing the problem, Cheung said: "We believe it is a very worrying matter. We are now in a very strange situation where property prices are rising. Even rents have risen beyond the level of 1997. I think it is difficult to say whether property prices are right or not, and whether people should enter the market. But as I have said before, do not panic [and rush to buy new flats], but instead consider your capability and actual need."

Financial Secretary John Tsang Chun-wah said the government had introduced several measures in the past few years to stabilise the housing market, and the supply in the near future should not be a problem. He said the government had not seen an impact on the city from the third round of quantitative easing in the United States, but it "was always prepared".

Cheung admitted that because of rising property prices there was a growing need among single young people for public housing, and pledged that the administration would focus on easing the housing needs for this group and those in their 40s.

"There are more than 200,000 people waiting for public housing units, of whom nearly half are single people [below 65], and many are under 30 years old," Cheung said.

Cheung, who will chair the government's Long-Term Housing Strategy Steering Committee, due to meet for the first time tomorrow, said the committee would take into account the needs of young singles as well as those in their 40s. The committee would consider plans to increase land and housing supply, including turning industrial buildings into homes for single people.