Date
23 October 2017
Small housing units in Hong Kong had the highest price increase of all categories covered in an official survey. Photo: Bloomberg
Small housing units in Hong Kong had the highest price increase of all categories covered in an official survey. Photo: Bloomberg

Property market cooling measures show no sign of biting

A measure of private housing prices in Hong Kong has hit a record high, countering claims by Chief Executive Leung Chun-ying and other top officials that government property controls are beginning to bite.

The Rating and Valuation Department said the official price index for private domestic units in Hong Kong hit 246.8 points in May, a second monthly rise in a row and an increase of 0.78 percent on April. The previous peak was 246.3 in August last year, Hong Kong Economic Journal reported Tuesday.

The price index for small homes — those with a saleable area under 431 sq ft — rose 0.94 percent during the month to 267.4 points, a record high in this category and the biggest rise in all categories.

The relaxation of the double stamp duty in May was not reflected in the figures for that month. The duty was eased to encourage homeowners to upgrade their flats by exempting owners from tax of up to 8.5 percent if their old units are sold within six months of a formal agreement to buy a new one.

Government sources told the newspaper that they expect to see further rises in the housing price in June and July. The government has not yet decided whether to introduce more cooling measures.

Real estate agencies that painted a grim outlook for the property market earlier this year were also revising their view.

Centaline Asia-Pacific chief executive Addy Wong said adjustment was ending and property prices were rising.

Ricacorp Properties CEO Willy Liu also expected property prices to rise moderately overall in the second half.

But Midland Realty chief analyst Buggle Lau said that although property prices might bottom out soon, price hikes are unlikely due to the property cooling measures, growing housing supply and an expected rise in interest rates.

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JH/JP/SK

EJ Insight reporter

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