Property price bubble threatens Hong Kong anew

Despite efforts to curb its growth, the property price bubble is again showing signs of strength.

In a worrisome signal to the government, property prices increased almost 4% this year after falling some 5% in the second half of 2011.

The government is poised to rein in the bubble should it see signs of overheating in the property market, said Financial Secretary John Tsang.

The government is determined to increase land supply and will continue with measures to maintain stable home prices, Tsang said. He also warned property buyers not to blindly follow the market.

“I remain highly concerned about the risk of a price bubble” considering the prevailing low interest environment, Tsang said.

Housing prices increased by more than 70% between 2009 and mid-2011 due to record low mortgage rates and huge demand from wealthy mainland Chinese buyers.