Hong Kong home prices hit record high despite cooling measures

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. 

PHOTO: BLOOMBERG

JUL 8, 201510:59 AM

[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

    
 

Asia stocks sink on Greece fear

PHOTO: REUTERS

JUL 8, 201511:09 AM

[HONG KONG] Asian markets tumbled Wednesday after Greece was slapped with a deadline to submit fresh bailout reform proposals or face a eurozone exit, while Shanghai and Hong Kong plunged as fears about China's stock collapse spilled over into regional markets.

The European leaders' ultimatum to Athens, which could see it ejected from the currency bloc at the weekend, saw traders scramble to safer investments, pushing the yen higher.

Shanghai tumbled almost seven percent and Hong Kong lost 4.74 percent soon after opening, despite Chinese leaders announcing a slew of measures to staunch a mainland bloodletting that has wiped trillions off the country's markets.

Elsewhere in Asia Tokyo was 1.52 per cent lower by lunch, Sydney slipped 1.26 per cent and Seoul was off 0.99 per cent.

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"The pricing in of the Greek debt problem is continuing, but we still have a lot of uncertainty," Hiroichi Nishi, a manager at SMBC Nikko Securities in Tokyo, told Bloomberg News.

"Continuing declines in Chinese stocks, or fears that the Chinese economy will keep slowing down, will weigh on the market."

With the crisis now entering its endgame after more than five months, the euro - which has held up despite ongoing uncertainty - edged lower Wednesday.

It fell to $1.0990 from $1.1007 in New York, although it is up slightly from a five-week low of $1.0916 it hit at one point in US trade. The single currency was also at 134.41 yen against 134.89 yen.

The dollar was at 122.24 yen against 122.55 yen.

On Wall Street the Dow added 0.55 per cent, the S&P 500 jumped 0.62 per cent and the Nasdaq rose 0.11 per cent.

BLOOMBERG