Hong Kong says ready to avert possible property bubble
10.14.09, 01:19 AM EDT
HONG KONG, Oct 14 (Reuters) - Hong Kong's government will keep a close eye on the city's escalating property market in coming months, and could act to increase land supply for residential development, given concern about a possible property bubble, Chief Executive Donald Tsang said on Wednesday.
'The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home, and the possibility of a property bubble,' Tsang said in his annual policy address to the Legislative Council.
'The government will closely monitor market changes in the coming months. When necessary, we will fine-tune land supply arrangements ... with a view to quickening the pace of bringing readily available residential sites to the market.'
Demand for property has surged this year, particularly for luxury units, putting pressure on the government to free up more land, which it tightly controls. The government has not held any residential land sales for around 1-陸 years.
Strong demand from wealthy mainland Chinese buyers was expected to be a key driver of local property prices, with such buyers making up 11 percent of the market, according to Nomura, which warned that a bubble could emerge.
'Strong liquidity, low supply, strong external demand and aggressive mortgage lending are creating ideal conditions for another housing bubble in Hong Kong,' wrote Nomura property analyst Paul Louie in a report.