Property speculation curbed, but risk of bubble remains, says John Tsang

PUBLISHED : Monday, 03 June, 2013, 7:37pm
UPDATED : Monday, 03 June, 2013, 8:27pm

Financial Secretary John Tsang Chun-wah warned on Monday that the risk of asset bubbles remained despite the recent government measures to curb a heated property market.

Tsang raised his concern over property risks when briefing the Legislative Council’s financial affairs panel on Hong Kong’s latest economic situation.

He said measures implemented in February to cool down the housing market had been effective, with the number of transactions falling by 24 per cent in April.

Prices fell 0.1 per cent month-on-month in March and ... 0.7 per cent in April
Financial Secretary

In February, the government announced, among other measures, a doubling of the stamp duty levied on the sale of residential and non-residential properties priced above HK$2 million.

"Housing prices fell slightly, 0.1 per cent month-on-month in March, and dropped by a further 0.7 per cent in April," Tsang added.

But even so, Tsang said that flat prices had already soared 127 per cent from their 2008 level and interest rates had remained low.

On average, Hongkongers spent more than half of their incomes – 56 per cent — on mortgage payments in the first quarter of this year, compared with an average of 48 per cent between 1993 and 2012, he said.