Hong Kong now has some of the highest property prices in the world, according to financial services firm, Price Waterhouse Coopers, which means there's plenty of focus on the regulation of its market. For example, prices soared by 134 per cent between 2008 and 2013, as per Globalpropertyguide.com, climbing even after new taxes were issued by government during that period. The incredible level of growth came amid low interest rates and strict rules on new construction that only served to fuel demand, eventually spurring the city’s central bank, the Hong Kong Monetary Authority (HKMA), into action. The HKMA zeroed in on home loans and sought to cool the market by lowering the loan-to-value ratio for owner-occupier homes under HK$7m. Finally, prices fell and have been in decline over recent years, but the government has no intention of relaxing the measures just yet, says senior manager at Knight Frank, Greater China, Pamela Tsui.

The HKMA regularly considers the measures needed to adjust its rather busy market. For example, the overall short supply of housing continues, relative to other cities and countries, and so the government is also focused on tackling that side of the market. Specifically, there will be around 110,000 new homes supplied from 2016 to 2020, representing about 22,000 units per year on average, says Knight Frank. The supply will focus on the New Territories, followed by Kowloon, while Hong Kong Island (about 10 per cent) will see limited supply. This commitment to the supply pipeline has already boosted property options in some areas, and Tsui sees that many buyers are now benefiting from discounts and incentives given on new housing projects, as developers aim to clear their inventories. In all, there are four financial regulators in Hong Kong including the HKMA. The others are the Mandatory Provident Fund Schemes Authority (MPFA), the Office of the Commissioner of Insurance (OCI) and the Securities and Futures Commission (SFC).  Together they oversee banking, the Mandatory Provident Fund (MPF), which is a pension scheme, insurance, securities and futures industries, and help maintain the financial stability of Hong Kong.

By Jean-Paul Pelosi