Prices and rents for mass residential property hit record highs last month as the new government failed to take action to cool the market.
'The market believes the new government [led by Chief Executive Leung Chun-ying] cannot cool the property market because its authority has been undermined,' David Ng Ka-chun, head of China and Hong Kong property research at Macquarie Capital Securities, said.
According to Centaline Property Agency's Centa-City Leading Mass Index, which charts average sale prices at 85 large housing estates, flat prices on the secondary market climbed to 103.71 points on July 29 from 101.99 points a week earlier. That surpassed the previous record of 103.18 points on October 19, 1997.
Average rents at the 85 estates were HK$20.7 per square foot last month, according to deals handled by Centaline. That was above the previous record of HK$20.6 per sq ft recorded in September last year.
Residential rents rose 9.5 per cent from HK$18.9 per sq ft in February, while property prices increased by 10.5 per cent in the first half.
'Property prices continue to rise as homebuyers believe the new government will not introduce strong measures to the market,' Centaline associate research director Wong Leung-sing said.
'Also, the US central bank will stimulate economic growth with a third round of quantitative easing and drive people buying homes to hedge against inflation.'
