Red-hot Hong Kong property market extends record price run

[HONG KONG] Hong Kong's private home prices hit a record high for the sixth month in a row in April, reflecting a market fervour that the authorities are eager to tame, according to government data released on Wednesday.

The Asian financial hub is one of the least affordable places on earth, where a nano-apartment of less than 200 square feet can cost as much as US$500,000.

The dearth of supply, low interest rates, and the flow of capital from mainland China pushed prices up over 137 per cent since the financial crisis in 2008.

In April, home prices rose 2.12 per cent from the previous month, according to an index compiled by the Rating and Valuation Department. The figure, at 327.4, surged nearly 20 per cent year-on-year.

The latest index does not reflect the latest mortgage tightening measures announced by the city's de facto central bank earlier in May.

"If property prices keep breaking records in the next month or two, I expect the government to introduce new cooling measures," said property consultancy Knight Frank's Senior Director Thomas Lam in a text message.

He expects prices to rise 5 to 10 per cent this year.

Despite the high prices and the government's tightening measures, the market fervour appeared undiminished as thousands flocked to snap up the 500 flats for sale at a new property project last Friday, with some saying they are eager to buy flats now before prices rise further.

Tackling the city's rocketing prices will be a major task for incoming leader Carrie Lam, who will be sworn in on July 1.

REUTERS