New round of mortgage tightening likely amid fears of property bubble
Fears of property bubble set to lead to sixth round of tightening measures since 2009
The Hong Kong Monetary Authority is poised to launch its sixth round of mortgage tightening measures since 2009 and has given its strongest warning yet of a bubble in the property market.
"The overheating property market remains the biggest risk factor to the stability of the Hong Kong economy," Norman Chan Tak-lam, chief executive of the authority, told lawmakers at a monthly financial affairs panel meeting yesterday.
Chan said household debt was near the record high of 60 per cent of GDP reached in 2002, with the ratio edging close to 59 per cent in the fourth quarter.
His warning came after the previous five rounds of mortgage tightening measures and tax measures introduced in October failed to cool down the market.
Despite a fall in sales volume and mortgage applications, prices have shown signs of rising.
Prices retreated by 1.6 per cent from a record high after the introduction of a new buyers' stamp duty and adjusted special stamp duty on October 27. But they recovered and are back at new highs, said Macquarie Securities.
The Centa-City Leading Index, which tracks home prices in 100 housing estates in the secondary market, rose 0.63 per cent week on week to 119.13 on February 1 - a record. The index's benchmark of 100 reflects prices in July 1997.