Flats frenzy propels prices to another recordTop News | Reuters and Samantha Wong 1 Jun 2017
Hong Kong home prices hit a record high for the sixth month in a row in April, government data show, reflecting a market fervor that authorities are eager to tame.
The city is one of the least affordable places on Earth - an apartment no bigger than 200 square feet can cost as much as HK$4 million.
The dearth of supply, low interest rates and the flow of capital from the mainland have pushed prices up more than 137 percent since the financial crisis in 2008.
In April, home prices rose 2.12 percent from the previous month, according to an index compiled by the Rating and Valuation Department. The figure, at 327.4, surged nearly 20 percent year on year.
The index does not reflect the latest mortgage tightening measures announced last month.
"If property prices break records in the next month or two, I expect the government to introduce new cooling measures," said property consultancy Knight Frank's senior director Thomas Lam Ho-man. He expects prices to rise 5 to 10 percent this year.
The market fervor appeared undiminished as thousands flocked to snap up the 500 flats for sale at a new property project on Friday.
Some of the buyers said they were eager to buy flats now before prices rose further.
Authorities have failed to rein in prices despite eight rounds of mortgage tightening by the Hong Kong Monetary Authority since 2009, on top of a series of tax and regulatory policies imposed by the government.
Tackling the city's rocketing prices will be a major task for incoming leader Carrie Lam Cheng Yuet-ngor, who will be sworn in on July 1.
Meanwhile, the HKMA said the number of mortgage applications in April decreased month-on-month by some 16.5 percent to 13,027.
Mortgage loans approved last month fell by 13.6 percent compared with March to HK$31.9 billion.
Among these, mortgage loans financing primary market transactions plunged by 17.8 percent to HK$6.2 billion and those financing secondary market transactions decreased by 8.9 percent to HK$17.3 billion.
Mortgage loans for refinancing dropped by 19.3 percent to HK$8.4 billion.
The ratio of new mortgage loans priced with reference to HIBOR decreased from 94.1 percent in March to 94 percent in April.
The ratio of new mortgage loans priced with reference to best lending rates slid from 2.2 percent in March to 2.1 percent in April.
The outstanding value of mortgage loans increased by 0.4 percent to HK$1,142.2 billion.