Hong Kong will limit property investment immigration and increase housing supply to cool down the red-hot property market, said Donald Tsang, Hong Kong chief executive.
Mr Tsang said in his annual policy address that the Hong Kong government would temporarily limit immigration based on property investment. He added that the government will also release more land to build 20,000 private flats yearly over the coming decade and 61,000 private residential units will be added over the next three to four years.
Kelvin Lau, an economist at Standard Chartered, said the “best case scenario is a (price) consolidation from now on or even a mild correction, but I think the greater likelihood is we will see a still rising trend but hopefully a slower pace than before.”
Many property analysts expect property prices to continue to rise until next year, albeit at a slower pace, as buyers from mainland China can easily ignore the new policy and acquire flats anyway, while extra housing supply will take years to be ready.
The city-state, which is facing the threat of a property bubble, has raised the down payment on home acquisitions over the past year, lifted stamp duty for luxury homes to dampen prices and held more land auctions to ease supply.
Some analysts said the restriction of immigration linked to property investments would have a psychological impact.