The government has increased the stamp duty to 15 percent for all home purchases, except for first-time home buyers who are permanent residents.
Hong Kong Transport and Housing Secretary Anthony Cheung revealed that the government has increased the stamp duty to 15 percent for all home purchases, except for first-time buyers who are permanent residents, reported Bloomberg.
The new measures, which took effect last Saturday (5 November), are expected to cool the world’s most expensive property market, which has seen prices rebound following a short-lived decline.
The resurgent property market poses a headache to the city’s Chief Executive Leung Chun-ying, who had touted his success in curbing property prices ahead of a March election.
Since 2012, Leung has rolled out a slew of measures to cool the housing market, and his record may affect China’s decision on whether to continue supporting him.
The Centaline Property Centa-City Leading Index, which monitors sales in the secondary market, has rebounded 13 percent since hitting a low point in March. To date, the index is just two percent below the record achieved last September.
“Market sentiment has had massive changes in the past few months,” noted Raymond Cheng, a property analyst at CIMB Securities, who previously predicted prices would fall 20 percent from their peak.
Home prices, however, dropped 13 percent from their September 2015 peak to the March low, before rising again. With this, Cheng now expects property prices to increase between three and five percent in both 2017 and 2018.
In yet another sign of the hot property market, a subsidiary of HNA Group Co outbid Hong Kong property developers including Cheung Kong Property Holdings to acquire land in the former Kai Tak airport area, with an HK$8.84 billion (S$1.5 billion) offer – the highest paid for a government land sale in three-and-a-half years.
“We all think pricing is crazy,” said Denis Ma, Research Head at JLL Hong Kong, referring to the prices paid for land at auctions.
“A lot of buyers use that as evidence that the market is going to go up.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
