Hong Kong house prices eclipse 1997 high

Hong Kong Property

The Hong Kong Monetary Authority has revealed that high-end homes now command prices high than during the 1997 Asian money crisis.

A 100 square meter home is now 13.8 percent more expensive than in 1997, and experts now fear that a housing bubble is beginning to take shape.

The immensely populated city of Hong Kong is seeing massive demand for homes, and Donald Tsang, the city's chief executive, is attempting to slow things down with measures including no more automatic residency for rich property buyers.

Simon Smith, head of research and consultancy at Savills, Hong Kong said: “The government is struggling to find an effective policy response to rising prices. Limited new supply of housing, low interest rates and increasing numbers of mainland buyers are all helping to push values to record highs. It looks like this is something we will have to live with for the time being.”

The original Asian crisis kicked off in 1997 when the bhat, Thailand's currency, collapsed. During this time house prices in Hong Kong slipped by 60 percent. However in recent years Hong Kong has seen strong growth, with house prices increasing by around 45 percent, even with the global financial crisis occurring.