Jun 27 2017
Watch Property Market
In the past three years, Hong Kong property market has increased about twenty per cent. This is a big increase. Government, in order to press down the property price, has increased transaction tax up to fifteen percent. Then, in total, property price has increased by thirty percent.
As the price is too high now and it is possible that price may drop down instead of further increase.
Why property will increase so much? It is, of course, due to the supply and demand. But the question is that population has not increased by thirty percent in the past three years.
It has been caused by the speculators, not by the real demand. But, Hong Kong is a free trade market. If the demand is below the supply, the price will drop automatically. The question is when the market will drop, we do not know.
In the theory of economy, a quick increase, like tide, will also fall quickly. It is a rule basically.
We can see from the attitude of the banks, who will only lend money against the mortgage of property at forty percent of market value. Banks indication is to show us that market is to be down in the future. But, when, we do not know.
For past many decades, Hong Kong is short of land which is the main factor of high price in property. But, now MTR is extending its railway to suburb and one day more people will move to suburb. At that time, property price may calm down to a steady situation.