What must Hong Kong do to rein in surging home prices?
Panel discusses challenges and ideas ranging from taking on powerful groups to a need for socially innovative solutions
Hong Kong’s home prices may be surging from one record high to another, but the prospect of reining them in over the next decade may not be as far-fetched as sceptics make it out to be, according to experts.
Price corrections however, will also depend on external factors such as US interest rate rises, mainland Chinese and US economic conditions, and the city’s own housing supply strategy.
That was the main takeaway on Wednesday from the South China Morning Post’s fifth “Redefining Hong Kong” debate series, titled: “Can Hong Kong rein in runaway housing prices?”
More information pledged on deals blasted as ‘favouring the rich’
“Hong Kong is an open economy and a very small place. If you look at the price corrections the past three or four times, it was mostly caused by external factors,” Buggle Lau Ka-fai, chief analyst at Midland Realty, said.
“The day the US starts increasing interest rates by large amounts and the mortgage rate goes up, together with a not-so-good economy and [expectations of an] increase in [housing] supply, property prices will come down. But we don’t know when that will happen. It’s the million dollar question.”
With external factors influencing demand out of the government’s control, Hong Kong has been focusing on ramping up land supply and flat construction.
The official target is to build 280,000 public and 180,000 private flats up to 2027. Last year, the government conceded it would not meet the former mark, due to difficulties securing land.