HONG KONG (Reuters) – Hong Kong’s chief financial officer said on Thursday he did not see severe risks to the city’s property market and no need to adjust property control measures, as the financial center braced for further interest rate hikes.
Finance Minister Paul Chan was speaking after the Hong Kong Monetary Authority raised its base rate charged through the overnight discount window by 75 basis points to 3.5%, the highest level since October 2008, following the same move by the US Federal Reserve.
Chan said that while house prices in Hong Kong fell nearly 6% in the first eight months as price hikes hurt sentiment, the real estate market depends on many factors including employment and the ability to pay for homeowners.
“I don’t think there is a risk of a sharp adjustment,” he said. “Market coefficients are low, but there is no need to adjust control measures.”
The current measures include stamp duties on non-Hong Kong citizens and second-class home buyers.
Hong Kong banks, which have lagged behind their US counterparts in raising interest rates in recent months, are expected to raise their best lending rate as soon as Thursday, the first increase since 2018.
Official data showed that Hong Kong’s private home prices in July fell to their lowest since February 2020, as homebuyers turned bearish on higher interest rates and an uncertain outlook.