Hong Kong Financial Secretary John Tsang on Sunday warned of rising risks in the local property market amid global uncertainties, in particular the crisis in the euro zone and the weakness of the U.S. economy, as low interest rates threaten the stability of the city's housing market.
"Hong Kong's real estate market is between ice and fire," Tsang said in a post on his blog, referring to the global economy and the city's cheap credit environment. Property prices have been rising rapidly since February, and last month they were up 8% from December and 13% above the levels of the 1997 property market boom, he said.
The surge in local property prices has been partly fueled by low interest rates and liquidity, Tsang said. "That's very unhealthy against the context of a weak global economy," he said, adding he is concerned about a property market bust if the global economy slows further or interest rates increase.
"The government will stay vigilant. I won't hesitate to launch measures, when necessary, to keep the property market healthy and stable," he said.
- Dow Jones Newswires