With the housing market in Hong Kong slumping to a 25-year low, the government needs to relax housing curbs immediately so that the market can stabilize itself. In situations like these that are near dire, I believe that the best thing a government can do is take a step back and allow the consumers to control their own market so it can restabilize.
Hong Kong's property curbs are likely to stay until prices drop further. This is because of increased supply and rising interest rates. The government will be careful about which measures to relax when prices drop. Until tax legislation is passed, the housing market will be uneven in terms of supply and demand. Over time, there will be a moderation of prices, and people will buy houses.
The Hong Kong government should relax property curbs in the face of a 70% slump in housing prices. These were put in place during a time when the market was red hot, and there was fear of excess speculation. That is no longer the case. In order to boost demand and make it more market based, property curbs should be relaxed.
Although the property curbs seem to be contributing to the current housing market slump in Hong Kong, the market has shown itself to be resilient in the past and somewhat self-policing. I do not believe that the Government should set itself the precedent of being a slave to the market in this instance.