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Government's response to procession

     In response to the procession of the estate agent trade today (July 7), a Government spokesman said that the Government understood the concern of the trade on the demand-side management measures, but stressed that such measures were considered necessary under exceptional circumstances to curb market exuberance with a view to ensuring the stable and healthy development of the property market.

     "The demand-side management measures introduced in October last year and February this year respectively are intended to help Hong Kong's macroeconomic and financial stability, to the benefit of the overall economy in the long term. The Government considers that if the overheated property market is not cooled down in a timely manner, property prices will further deviate from our economic fundamentals, leading to greater impact on the market and a more painful adjustment to society should there be any change in interest rates and the external environment. On balance, we believe that those measures serve the best interest of the community as a whole," the spokesman said.

     "Although the residential property market has shown signs of cooling down following the introduction of the demand-side management measures, the market sentiment remains unsettled. Despite the recent message from the Federal Reserve of the United States on the possibility of gradually reducing its bond-buying programme, the risk of a property bubble cannot be ignored, taking into account the fact that the low interest rates and abundant liquidity environment still persist, as well as the tight supply in the short run."

     "The Government will continue to closely monitor the development of the residential property market, with reference to a basket of indicators including property prices, the housing affordability of the general public, the volume of property transactions, the supply of residential properties, growth in mortgage lending, and speculative activities, etc. Also, the Government has been monitoring the employment situation in the property-related sectors. As these are extraordinary measures introduced under exceptional circumstances, they will be adjusted or withdrawn once the property market has restored to normal condition," the spokesman added.

Ends/Sunday, July 7, 2013
Issued at HKT 14:01


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