2 February 2015 - Latest US economic statistics are below expectations and show a slowed pace of recovery. The Federal Reserve expressed reluctance in increasing interest rates before June this year.
Mr. Norman Chan, Chief Executive of HKMA, was questioned this morning in the Legislative Council about his views on the Fed’s newest announcement and its influences on the property market. He said there are uncertainties regarding the timing of an interest rate increase, though some market participants are expecting this to be postponed by an extra 2-3 months. Chan believed an interest rise is likely to happen within this year, and will cast influences on the property market, which he stressed the Authority will keep a close eye on.
Meanwhile, Hong Kong homes prices continue to hit record highs. In the first month of the year, the Centa-City Leading Index reached 134.03, with a 1.19% monthly increase. Norman Chan explained that the upsurge last year was mainly driven by the middle to small sized property market, while activity in the property market this year will be determined by increasing supply and appreciation of the US dollar. He added that if home prices remain overheated, the Authority will implement counter-cyclical measures when necessary.