IMF:Fed rate hike likely Hong Kong's property market is facing crisis

Annual assessment of Hong Kong's economy, IMF said, at present, excessive development of the real estate market also means that if interest rates rise more quickly than anticipated, Hong Kong's economy will become extremely vulnerable.

IMF assessment, concluded that Hong Kong is currently the three biggest risks first is future interest rates rise and potential global market uncertainties, and the second is China's economic pressure and the third is the downturn in the real estate market.

With the Federal Reserve (Fed) hike tendencies are becoming evident, and monetary policy in Hong Kong and the United States is linked, that is, the linked exchange rate system, financing costs in Hong Kong is expected to sharply raise interest rates by the Fed moves, and climbing fast.

In the evaluation report, the IMF pointed out that if the United States raise interest rates faster than expected more quickly or the weakness of the global economy, may have high variable interest rates have a negative impact for household mortgages.

And in interest rate rose of scene zhixia, estimated injured most serious of, will will is Hong Kong Housing, this not only because Hong Kong prices has serious overheating, prices proceeds than also is obviously high, according to UBS in October end of released of global housing bubble index displayed, in integrated the housing pointer zhihou, currently Hong Kong Housing of "bubble risk" has high home global second bit, after United Kingdom London.

Hong Kong's property market in September 2015, reaches its peak, rising uncertainty in the global economy and demand from China after lower prices temporarily down, but beginning in March, prices rose gradually, in early November near historic highs.

Last month, the Hong Kong Government has been taking measures to cool the housing market, such as the non-Hong Kong residents to buy homes for the first time the tax 15%, and foreign investors are not Hong Kong permanent residents, burden of adjusted rates more aggressively to 30%.

IMF said that while the financial system has to adapt to the environment's flexibility, but this vicious cycle will have on the real economy, low collateral value, lower credit growth and weak household consumption and corporate spending. Higher than expected Hong Kong's economy has shown flexibility in a stable job market, underpinned by Hong Kong's economic fate earlier this year out of tight, exports also improved with the stability of regional trade. IMF forecasts economic growth rate of Hong Kong in 2016 is 1.5% in 2017, will rise to 1.9%.