IMF: Caution, Hongkong Property Price sudden sales drop!

The International Monetary Fund (IMF), Wednesday (12/12/2012), warned that Hong Kong may experience a sudden drop in property prices. The warning was given after years of a dramatic increase in one of the most expensive housing markets in the world. House prices in Asia's financial hub has soared 90% since 2009. This happens due to the influx of wealthy buyers from mainland China which encourages home ownership beyond the reach of many of the 7 million citizens.Chicago REO properties The IMF warned that the sharp rise in house prices which rapidly increases the risk of a sudden correction. In the annual review of Hong Kong's economy, a sharp price correction would result in the value of the collateral falls and have a negative impact on wealth, which can lead to adverse feedback between economic activity, bank lending and the property market. IMF rate, the property sector is a major source of risk in the domestic economy. However, the possibility of a price correction large enough to cause a macroeconomic and financial consequences in the short term is quite low. Hong Kong government itself announced a stamp duty of 15% on the buyer's non-permanent residents and companies as well as higher stamp duty on resale property in three years by the end of October. This was done in an effort to control price hikes, as the global economic downturn continues to affect the domestic economy. The IMF said it expected Hong Kong's economy grows 1.25% this year, before rebounding to 3% in 2013. The leader of Hong Kong, Leung Chun-ying, warned last week that the city requires an increase in housing supply and create more living space or risk losing talent "best" and "brilliant".