Sales of luxury homes in Hong Kong have achieved new highs despite the government’s efforts to control rising prices.
Luxury home sales, or those worth over HK$20 million, have broken records both in transaction value and number, defying property cooling measures, which include a crackdown on speculation and higher stamp duty.
According to data released by Centaline Property Agency, a total of 2,628 luxury homes were sold from January until early November, totalling HK$102.9 billion.
These figures have already exceeded full-year figures recorded since 1996, which include the red-hot years of 1997 and 2007, when 2,240 and 2,399 transactions were recorded, respectively.
Including commercial and other property categories, there were a total of 3,223 transactions worth more than HK$20 million from April to October, up 86 percent from last year, said professor Chan Ka-keung, secretary for financial services and the treasury.
The involved stamp duty hit HK$6.16 billion, up 127 percent compared with the same period in 2009.
The continuing buoyancy of the property market was sustained not only after the stamp duty increase in April, but also after the government and the banking regulator announced more measures in August to stop quick flat resales, cracked down on mortgage lending for more expensive properties and pledged to release more land for sale.
Research conducted by the Hong Kong Monetary Authority showed that the average price of a luxury flat was 14 percent higher than the earlier historic peak achieved in Q3 1997.
“The government doesn’t have the ability to cool the property market, unless it is going to damage the basic principles of our economy,” said Eric Wong Chun-yu, co-head of Asian real estate research at UBS.
Wong said it was normal to see a growth in the transaction numbers year-on-year since the market was relatively weak in 2009 following the worldwide financial crisis.
Wong also expects a 35 percent increase in home prices by end-2011, with incomes growing and the supply of new flats and interest rates remaining low.