Financial Secretary Paul Chan Mo-po says he cannot see any room for loosening the property curbs, imposed to cool the heated home market.
Chan gave his view in a blog on the US interest rate increase and the local property market. He thought the home market would twist because of a larger home supply in the coming years as well as uncertain external factors.
The potential supply of first-hand homes is as high as 94,000 while the external economic factors, including trade policies of the US and elections in several countries, will adversely affect the demand for homes and the asset prices.
Under these conditions, the market remains hot, which is worrying, Chan said. Therefore, the government has no plans to lessen the cooling measures.
Despite the low interbank rate in Hong Kong, he believed there will be further rate rises as long as the US economy keeps improving. He stressed higher interest rates will be a trend in the future while the pace of US rate increases may be even faster.
The US Fed sees interest rates will be close to 3 percent in two years. Chan says the local rate will follow the US rate under the pegged currency system.
A Hong Kong rate rise is only a "when" question, not a "yes-no" question.'
Chan also warned local interest rates may be lifted rapidly if capital flows out of Hong Kong quicker.
He criticized the claims that "home prices will only grow" for lack of objective evidence. When the US imposed interest rate increases the past few times, local home prices also slowed down and even fell.
Lifting the interest rate will affect all home buyers and also increase the burdens of borrowers, Chan said.
The latest property curb was imposed last November, which lifted the stamp duty on trading homes to 15 percent.