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Hong Kong slowdown fears grow

Fresh warnings have been sounded about the Hong Kong property market

The Royal Institution of Chartered Surveyors (RICS) said underlying economic data would act as a brake on house prices.

It comes after the institution warned in July that Hong Kong’s property market could become volatile.

Even so HK$25.2bn (£2.0bn) of mortgage loans were approved in August – up 29 per cent from the previous month.

The number of mortgage applications increased by 32 per cent over the same period to 14,023.

But this came despite a decrease in year-on-year industrial production in the second quarter of 2012, and the lowest annual growth in retail sales for three years in July.

RICS economist Andy Wu said: ‘We believe near-term risks to the growth outlook are still weighted heavily to the downside.

‘Risks for property prices seem tilted to the upside in the near term due to the Fed’s latest phase of quantitative easing.

‘The Hong Kong Monetary Authority has recently introduced a new round of tightening measures to mitigate the risk of a bubble.

‘Nevertheless, stretched affordability, a slowing economy and investors’ aversion to risk will likely act as a brake on the pace of property appreciation.

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