HONG KONG: Hong Kong carries the dubious honour as the world’s least affordable city to own a home, but many property industry veterans still firmly believe they can do no wrong in buying a residence here. Home prices have surpassed their 1997 peak by 40 per cent, and this has prompted the government to roll out no fewer than three cooling measures in seven months, from a 15 per cent stamp duty to credit tightening. Thus far, they have done little to arrest the price surge.
“The government’s relative caution comes after some painful lessons from previous landslide declines in home prices” because the property market had taken it right on the chin during the worst days of the global economic crises, said Buggle Lau Ka-fai, chief analyst at Midland Realty. Home prices plunged as much as 70 per cent during the 2003 severe acute respiratory syndrome (Sars) outbreak from their 1997 peak, saddling 105,697 homeowners with negative equity – where homes were worth less than their outstanding mortgages.
