Hong Kong – one of the most expensive cities to live in, not only in Asia but in the world. Home prices there have been skyrocketing with no sign of relief in sight.
Continuous rise in Hong Kong home prices
While Singapore and Hong Kong are different in many ways, there too are similarities. And the Singapore government’s recent warnings about a possible future supply glut could just be their way of containing a similar situation before it gets out of hand.
The Hong Kong government’s many attempts at suppressing home prices have not resulted in much success. In fact, some may even say that the moves have pushed prices up.
Property prices in Hong Kong have increased by more than 12% in 2016 alone. This year, it is expected to rise another 10%. And this is not yet taking into account the almost huge leap from a decade ago. Hong Kong leader Carrie Lam has said that though she has not promised to suppress property prices, she is seeking more land in preparation for long-term housing supply.
Will Singapore follow in Hong Kong’s footsteps?
Hong Kong’s de facto central bank has implemented not just 1, 2 or even 3 rounds of mortgage tightening measures, but 8 since 2009.
Together with regulatory and taxation restrictions, this move may have effectively helped to stabilise the secondary supply. But the government now has no way of reversing the trend of skyrocketing prices.
Is it a matter of timing, or is the lack of land so evident? The Singapore government’s prudent release of land sites perhaps does not come as that much of an anti-market move.