HONG KONG • Hong Kong's red-hot property market kicked off the year with hundreds queueing to buy flats in the first major property launch of the year yesterday, backing expectations that strong demand will further lift record prices by 5 per cent to 20 per cent over the year.

The Asian financial hub has one of the most expensive housing markets in the world, with private home prices shattering historic records for 13 months in a row and rising almost 200 per cent since 2008.

Among some 100 pre-sale apartments offered by major local developer Sun Hung Kai Properties yesterday, the least expensive flat, at 382 sq ft, cost about HK$8 million (S$1.36 million), or HK$21,000 per sq ft, though with a certain plan, the buyer could get a discount. The flats are located about an hour away from the central business district.

"For everybody in Hong Kong, buying a flat is a life goal," said 26-year-old Ms Chau, one of the some 600 potential buyers queueing up in the first hour. "I am angry that housing prices keep going up. Now the value of HK$10,000 is like HK$1,000 in the past. For many people, they cannot afford to buy unless they have their family's help."

While Hong Kong's flats are getting more expensive, many are also getting smaller. Later this month, major developer Henderson Land Development is expected to launch sales for a residential project with flat sizes ranging between 180 sq ft and 420 sq ft.

Multiple property consultancies and agencies expect home prices to climb this year, with no immediate end in sight to the boom. Although the city's de facto central bank has imposed eight rounds of mortgage tightening measures since 2009, analysts say these have effectively locked up the second-hand market's supply, further fuelling prices.

But the government stresses it has no intention to relax the "spicy measures". Acting Secretary for Transport and Housing Raymond So told legislators last Thursday: "Due to very low interest rates, high liquidity and the imbalance of housing demand and supply, the property market is now still red-hot, prices are still at an extremely high level and there is no sign of it coming down.

"Therefore, at the moment, the government has no intention to ease 'spicy measures'."

REUTERS