Financial Secretary Paul Chan has called on potential homebuyers to beware of the effect on asset prices if the US interest rate continues to rise.
Mr Chan made the statement to the media today after the US Federal Reserve announced it will start reducing its quantitative easing measures.
He said Hong Kong's interest rate will need to follow suit if the US interest rate continues to rise, but the magnitude and timing may vary depending on capital flows, and external economic and political factors.
Mr Chan reminded potential homebuyers to consider that the interest rate will rise and more private flats will come on the market.
On the local economic situation, Mr Chan said the economic fundamentals are in good shape and he expects GDP to grow by up to 4% this year.
