Hong Kong home prices hit record high despite cooling measures

[HONG KONG] Hong Kong's home prices hit a record high in May, supported by strong demand and ample liquidity in one of the world's most expensive property markets, despite a series of tightening measures.

An official index of overall private home prices for May edged up 1.1 percentage points year-on-year to 298.4 points. That's 20 per cent higher than the year before and a second straight monthly gain.

Government data showed home prices have risen more than 7 per cent so far this year, underscoring the challenges for the city's leader, Leung Chun-ying, who has pledged to make housing more affordable.

The city's new home sales jumped to a record high in the first half of the year as low interest rates in China and abroad continue to drive cash-rich Chinese investors to the high-end home sector amid hopes for higher returns in the former British colony.

The relentless rise in home prices has prompted renewed concerns that the government may impose more property tightening measures such as stricter mortgage restrictions in order to puncture the trend.

Hong Kong's home prices have jumped more than 170 per cent since 2008 due to low interest rates and a supply shortage, shrugging off a series of government cooling measures including a 15 per cent tax on foreign buyers.

REUTERS