Shadow of 1997 bust looms as HK home prices and housing debt hit highs

Hong Kong

IN 1997, the Asian financial crisis touched off a six-year property bust in Hong Kong that shaved more than two-thirds off prices and saddled the city with a stagnant economy and deflation.

As Hong Kong gets ready to celebrate the 20th anniversary of its handover to China, which happened just as Asia's crisis began to unfold, that pain seems all but forgotten. Prices are at all-time highs. Mortgage borrowing is booming. Developers are bidding up the cost of land to records. People young and old are lining up to buy newly built apartments. In short, the kind of fervour that preceded the last bust is back.