Categorized | International

Hong Kong Housing Market Facing Risky Future

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The state of the global economy has many Hong Kong officials worried about the city’s own residential real estate market. Government officials are advising investors to be cautious when buying new properties, as the risks for a tumultuous period are on the rise.

Interest rates in Hong Kong are currently at historically low levels while property values continue to shoot up at unsustainable rates. Prices on residential properties are already up eight percent from where they were in December.

Hong Kong’s government officials believe that the current rise in the Hong Kong market is not happening for the right reasons. Property values are increasing, as buyers are looking to take advantage of the low rates and flipping potential. Economists see the trend as one that is similar to that which eventually crippled the United States.

The government in Hong Kong has made it clear, however, that they will not allow the residential real estate market face the possibility of a crash. They have vowed to put in place restrictive measures that will cool the market and prevent a major crisis.

While rising property prices is certainly a positive thing for real estate brokers and the market, it can also be a negative thing if prices rise too quickly. Right now in Hong Kong, the city is on the brink of rising too quickly. Actions may need to be taken to slow down the overall growth of the market. While such measures may have a temporary negative effect on the market, they will make it much healthier in the long term.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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