Find out the possible impact of Fed's QE tapering delay to Hong Kong

Will things get worse?

According to UBS Investment Research, the decision by the Fed to postpone QE tapering could offer some short-term respite for Hong Kong.

But as pointed out by their chief Asian economist, nothing really has changed. Hong Kong’s high debt levels and overvalued property prices continue to pose downside risks ahead.

Here's more from UBS Investment Research:

Total private sector debt now exceeds 180% of GDP, an increase of almost 40 percentage points since 2009.

Property prices have jumped over 130% across the broad and residential property prices, with price-to-income ratio still stuck at 14 years, remain unaffordable despite the government’s heavyhanded cooling measures introduced in February 2013.  

The domestic excesses mentioned above are to a large extent the direct outcomes of Hong Kong’s ultra loose liquidity conditions since 2008/09, as Hong Kong imported the accommodative US monetary policy through the peg.