Despite the introduction of higher property taxes, demand for residential property in Hong Kong shows no signs of slowing, especially from investors in mainland China, pricing many locals out of the market.

Property prices in Hong Kong’s booming housing market continue to hit new highs despite government efforts to cool the market.

But somewhat surprising is the fact that the average price of a home in Hong Kong stands at just over 18 times higher than the median annual household income, according to Demographia, a U.S. research company.

However, many experts believe that Hong King’s real estate bubble is a long way from bursting, thanks to low mortgage rates.

Snaking queues of thousands of prospective home buyers across Hong Kong suggest that authorities have made little progress in curbing a red-hot property market, where prices are at record highs.

At the Victoria Skye, a luxury project at the former airport site of Kai Tak and at the Ocean Pride development by Cheung Kong Property Holdings, people lined up for over 24 hours last month for an opportunity to buy a home.

In fact, demand was so high, that the developer decided to increase the price of homes at Victoria Skye by about 2% – not over a year, or a month, but in one day, according to Ming Pao newspaper.

An extract from an article in Hong Kong Economic Times stated: “Successive moves by the government in recent memory to cool the property market only resulted in it becoming crazier. The result is a sea of madness.”

The reality is that while demand for property in Hong Kong is booming, the existing trend is reminiscent of 20 years ago, just before Hong Kong suffered a property bust, which is why Hong Kong’s central bank chief, HKMA Chief Executive Norman Chan, expressed concern last month at the fact that people with limited financial resources were buying just because they thought prices would only keep going up, just like in a bubble.

Chan warned that when the property cycle reverses, “the impact will be serious”.