Hong Kong property prices may face drastic price correction: IMF
HONG KONG (AFP) - The International Monetary Fund (IMF) on Wednesday warned that Hong Kong could see an abrupt fall in property prices after years of dramatic increases in one of the world's most expensive housing markets.
Home prices in the Asian financial hub have skyrocketed 90 per cent since 2009 due to an influx of wealthy mainland Chinese buyers, pushing home-ownership beyond the reach of many of its seven million people.
"The sharp run-up in house prices raises the risk of an abrupt correction," the IMF said in its annual review of Hong Kong's economy.
"A sharp price correction would lead to falling collateral values and negative wealth effects, which could trigger an adverse feedback loop between economy activity, bank lending, and the property market.