Federal Reserve Chairman warns Americans

Alan Greenspan, the United States' central banker, has warned that the US residential property market is at risk of crashing, if Americans continue to force property prices ever higher.

It is the strongest warning yet from the Federal Reserve Chairman, who's comments sent share prices falling on Wall Street, at one point knocking 66 points off the Dow Jones industrial average.

In a pre-retirement speech, Mr Greenspan said that people were not allowing for the risk of price falls. He said "history had not dealt kindly" with investors who kept ignoring risks.
Mr Greenspan said that the US house-price spiral had become an economic imbalance, threatening stability like the country's trade gap or its budget deficit.

Rate rises in Hong Kong adds to pressure on property market

Hong Kong banks have raised lending rates to their highest level in four years, putting further pressure on what has this year been the hottest property market in Asia.

Banks started the trend by raising their prime lending rates by 25 basis points to 6.75%.

Vincent Kwan, chief economist at Hang Seng Bank, said property prices seemed to be holding up. "The cost of home ownership is increasing but the economy is improving and incomes are rising, so I think the property market is unlikely to suffer a significant impact from interest rates at this stage."

Fresh reports suggest that Hong Kong developers are now selling approximately only fifty units per week, a staggering drop from the 1,000 units being sold weekly back in April this year.