Real Estate
Property Firms Warn Of Slump Ahead In Hong Kong's Property Market - Report

Property firms expect a sharp fall in Hong Kong property prices and turnover as a result of new curbs that are designed to cool prices.
Some property firms in Asia are predicting turnover in Hong
Kong’s property market could collapse in the next three months
and prices fall in the wake of a sharp hike in stamp duty tax on
certain real estate deals, according to Bloomberg.
The prediction was made by Louis Chan, chief executive of the
residential unit of Centaline Property Agency. He said turnover
could crash by as much as 70 per cent and prices could fall by
between 5 per cent and 8 per cent. Separately, Ricacorp
Properties’s Willy Liu said transactions will drop 30 per cent to
40 per cent in the next two months and prices will fall 5 per
cent.
The predictions are caused by curbs to the market by the Hong
Kong government in a bid to try and cool red-hot price levels
making the city-state one of the most expensive, if not the most
expensive, in the world.
The news report said the Centaline Property Centa-City Leading
Index, which tracks sales in the secondary market, is up 13
per cent since reaching a low point in March and is 2 per cent
below its record level last September, highlighting why
policymakers have sought to curb prices. Some other figures
suggest a slightly less strong performance, however. According to
a recent quarterly report by Knight Frank, prime property prices
in Hong Kong fell 2.6 per cent in the 12 months to
end-September 2016. In Shanghai, by contrast, they skyrocked
by almost 24 per cent. Vancouver saw the strongest rise of all,
up 31.6 per cent.
Late last week, the government said it will raise the stamp duty
to 15 per cent for all residential purchases, with
an exemption for first-time buyers who are permanent
residents. The stamp duty's previous highest level was 8.5
per cent. Foreigners already paid the 15 per cent stamp duty
level. The change, the news report said, means foreign buyers
must shoulder a whopping 30 per cent stamp duty.
The report added that developers have already moved to suspend
sales in the city. Sun Hung Kai, Henderson Land and New World
Development Co are reportedly halting sales.