Hong Kong unveils new bid to cool property market

Hong Kong unveiled fresh measures Friday to cool its red-hot property market, as the finance minister warned that an asset bubble is forming in the southern Chinese city.

Property prices in the Asian financial hub, famous for its sky-high rent, have surged over the past few years due to record low interest rates and a flood of wealthy people from mainland China snapping up homes.

The government last year implemented several measures to curb the rise, including an unprecedented bid to restrict the number of non-local homebuyers with a 15 percent property tax on foreign investors, but prices have continued to climb.

"The risk of an asset bubble is increasing," finance minister John Tsang told a news conference, after saying that residential prices had jumped 120 percent since 2008, while prices for commercial properties had also soared.

He announced higher stamp duties, with the top rate doubled from 4.25 per cent to 8.5 percent.

"Maintaining a healthy, stable property market will be our ongoing endeavour. We shall continue to monitor the market closely and I will not hesitate to introduce further measures when necessary," Tsang said.

The new measures come after investors this week flocked to buy 360 hotel suites sold by the leading property developer Cheung Kong Holdings, a firm controlled by Asia's richest man Li Ka-shing.

Recent measures to rein in soaring property prices have drawn some investors away from traditional markets, sparking a craze in investing in alternative real estate markets, such as hotel rooms, car parks and offices.

Hong Kong's Beijing-backed leader Leung Chun-ying said last month that tackling the housing crisis was a top priority for his government, as he promised to increase land supply to boost the number of new homes.

Hong Kong's property prices have risen to become some of the world's highest in recent years, pushing home ownership beyond the reach of many of its seven million inhabitants and fuelling discontent towards the Beijing-backed city government.