Ceajer Chan Ka-keung, Secretary for Financial Services and the Treasury, said on Monday the government is considering counter-cyclical measures to curb rising home prices.
Speaking after a ceremony marking the first trading day of the Chinese Gold and Silver Exchange Society in the Year of the Goat, Chan acknowledged the continued uptrend in residential property prices, particularly in the case of small flats that used to be worth less than HK$3 million.
He said this was due to the low interest-rate environment, “inelastic” demand from end-users and speculation by investors.
Chan did not elaborate on the “counter-cyclical” measures that the government is considering, except to say that it is closely watching market developments.
Counter-cyclical measures, which run in the opposite direction of the current economic or market cycle, could include steps to curb speculation or limit the expansion of mortgage lending.
Positive factors going for Hong Kong include declining oil prices, economic recovery in the eurozone and the continued strong performance of the US economy.
Meanwhile, moves by several major central banks to cut interest rates and launch other quantitative easing measures are a major concern as they may lead to more exchange rate volatility, which in turn could hurt the global economic recovery.
“The recovery of the world economy cannot rely only on [currency] depreciation … Governments should try to find new growth points,” Chan said.
He said Hong Kong will follow the US timetable for raising interest rates. Although economic figures from the United States have been good so far, Chan noted the market’s major concern is whether interest rate cuts in several countries may affect the US timetable.
Chan said the People’s Bank of China is taking steps to further ease policies. And Hong Kong will benefit if these measures succeed in stimulating the Chinese economy, he added.
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