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Exclusive | Hong Kong must raise interest rates but wild swing in property prices unlikely, finance chief says
- Paul Chan says prime rate increase in Hong Kong is expected in coming months, but scale and pace need not follow US Fed’s move
- Financial secretary also refuses to rule out using edge of Tai Lam Country Park for housing
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Hong Kong will have no choice but to raise interest rates, although the pace or scale need not follow US hikes and it is unlikely to trigger the kind of property market crisis seen in 1998, according to the city’s financial secretary.
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While he called for calm in the face of higher mortgage payments for homeowners, Paul Chan Mo-po also offered hope to those aspiring to buy flats, promising not to rule out the option of taking over land on the fringes of a large country park for housing.
The previous administration had shot down calls to develop such sites, citing environmental concerns, but Chan said the option could help ease Hong Kong’s chronic shortage of affordable housing.
On the impending increase in borrowing costs, Chan told the Post in an exclusive interview: “The interest rate situation in Hong Kong is that under the currency board design, although our interest rate does not need to move up step by step like the US, unavoidably, it is on a rising trend.”
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