Market forces mean home prices are likely to carry on climbing
Despite the government's efforts, demand is still too strong to cool down the property market
When will property prices stop rising? That was the question a colleague asked when she was editing my report about Hong Kong property prices setting new records on three consecutive weeks this month.
It is also a question on the minds of many people who are not convinced that the new round of cooling measures introduced by the government last Friday is going to rein in the record-setting advance of prices.
So my answer to the editor was that property prices would probably continue to rise, even though they were now at such high levels.
In an attempt to curb price growth, the government introduced a buyer's stamp duty in October last year. But after taking a breather for two months to digest the impact of the measures, property prices continued their upward trend.
The average price of flats sold in the 100 major housing estates in the city as measured by the Centa-City Leading Index has now risen a shade under 6 per cent to a record-high of 121.58 points since the stamp duty was implemented in October.
While I hope the new round of cooling measures is able to curb the growth in property prices, I do not expect this to happen. Which is not to say the measures are ineffective, but rather that housing demand is unstoppably strong.