Hong kong property prices expected to stay high

Hong Kong property prices are expected to stay high, despite a new wave of market cooling measures.

Hong Kong property prices are expected to stay high, despite a new wave of cooling measures introduced by the goverment.

Authorities announced last month that the 2015 Land Sale Programme would include 29 residential sites, mostly located in the New Territories, wich will create approximately 16,000 flats. Knight Frank forecasts a new supply of approximately 19,000 units coming to the market in the next 12 months, which would meet the government's annual target.

Property prices, though, continue to climb, in spite of a wave of cooling measures since 2010. In response, the government has announced that residential properties worth HK$7 million or less will have their maximum LTV ratio lowered to 60 per cent from the previous 70 per cent, while lending for thosse borrowing for a second property has also been capped.

"We believe these new measures will affect buying sentiment in the sales market of small to medium-sized homes, in the short-term," predicts Knight Frank, but with first-time buyers still srong, the policies are expected to have only a "limited impact" on values.