City Beat | New thinking needed to tame Hong Kong’s overexcited property market

Tammy Tam says it’s not just a matter of when bubble bursts but also impact on next generation’s trust in government as well as city’s competitiveness

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Potential buyers flock to a sales office for the latest property offering. Photo: Edward Wong

Published: 4:15pm, 11 Jun 2017Updated: 9:58pm, 11 Jun 2017

Will Hong Kong’s property bubble burst soon? It’s a million-dollar question, the answer to which seems obvious unless you’ve been turning a deaf ear to the government’s increasingly frequent and intensified warnings.

From analysts and the city’s banking regulator to the chief executive, they have all been reminding homebuyers that the risks are real and a correction is imminent. The last cautionary message from Financial Secretary Paul Chan Mo-po revealed that property prices today are nearly 90 per cent higher than their peak in 1997.

Sounds scary? You would think, but the scenario on the ground paints quite the opposite picture: the queues of anxious homebuyers flocking to every new property sale just keep getting longer, it seems.

Have all these people lost their minds? Not really, looking at the reasons or “myths”, depending on who’s talking.

Firstly, government efforts seem to be doing no magic. After identifying housing as his top priority when he took up office five years ago, Chief Executive Leung Chun-ying recently explained the currently untamable state of the property market as the result of a “lag effect”, pointing out that it usually takes four years to complete a home building cycle.

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