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Hong Kong home prices scale new peak, 20 years after 1997 record

In 1997, a 451 square foot flat in City One Shatin – a housing estate popular with residents and investors alike – cost HK$3.06m, but that’s now doubled, according to data by Midland Realty

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Apartment buildings and office blocks clustered tightly together in Hong Kong's Kowloon district. Home prices in the crowded area of the city have risen by 120 per cent since 2008, and by more than 30 per cent from their previous peak in 1997. Photo: AFP

Hong Kong carries the dubious honour as the world’s least affordable city to own a home, but many property industry veterans still firmly believe they can do no wrong in buying a residence here.

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Home prices have surpassed their 1997 peak by 40 per cent, and this has prompted the government to roll out no fewer than three cooling measures in seven months, from a 15 per cent stamp duty to credit tightening. Thus far, they have done little to arrest the price surge.

“The government’s relative caution comes after some painful lessons from previous landslide declines in home prices” because the property market had taken it right on the chin during the worst days of the global economic crises, said Buggle Lau Ka-fai, chief analyst at Midland Realty.

Home prices plunged as much as 70 per cent during the 2003 severe acute respiratory syndrome (Sars) outbreak from their 1997 peak, saddling 105,697 homeowners with negative equity – where homes were worth less than their outstanding mortgages.

The new town of Tseung Kwan O in Hong Kong’s outlying New Territories. According to real estate agents in the city, Hong Kong property prices, even well away from the sky-high prices of Hong Kong Island, have now surpassed the peaks of 1997, which was the height of a property bubble. Photo: EPA
The new town of Tseung Kwan O in Hong Kong’s outlying New Territories. According to real estate agents in the city, Hong Kong property prices, even well away from the sky-high prices of Hong Kong Island, have now surpassed the peaks of 1997, which was the height of a property bubble. Photo: EPA
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Watch: How Hong Kong housing has changed in 20 years

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