Home price growth rockets to 8.4%

It's Hong Kong's strongest growth since 2009.

According to Knight Frank, quarter on quarter price growth jumped from 1.8% to 8.4% in Q2 in the Hong Kong residential market as sentiment improved and pent up demand drove up transaction volumes.

Here's more from Knight Frank:

However this increase in prices has been met by further government policies to cool the market, with the recent announcement of further lending restrictions and ten measures to increase housing supply.

The impacts of the new lending restrictions could reduce credit to the sector and slowdown price growth through the remainder of 2012.

More countries in Asia Pacific saw positive price growth in their respective residential markets in Q2 2012 than the previous quarter, with Hong Kong notably seeing its strongest quarterly growth since Q32009.

The ongoing uncertainty in the world’s economy continues to have an impact on markets. Weaker economic growth has impacted sentiment and in some cases the wealth of buyers, whereas property as a hard asset continues to be regarded as a safe investment choice, reinforced by inflation and often negative real interest rates.

This situation continues to be further complicated by government intervention into various property markets, which has continued through 2012, with Hong Kong, Indonesia and Malaysia notably recently introducing further cooling measures.

Fear that activity from central banks in the Eurozone, Japan and especially the US could lead to excess liquidity finding itself into property markets this side of the world, means that it is unlikely that any of the cooling measures will be lifted in the short term.

The conflicting policy objectives of boosting economic growth while avoiding excessive asset price appreciation means that government intervention in various forms is likely to continue.