Effects of Lifting Property Cooling Measures in Hong Kong: Surge in Real Estate Transactions and Caution Advised for Buyers
The real estate market in Hong Kong is experiencing a surge in transactions and excitement after the lifting of cooling measures aimed at curbing property speculation. The move has resulted in an increase in business for frontline workers in the real estate agency industry.
The cooling measures, which were implemented by former chief executive Leung Chun-ying to reduce external demand and property speculation, were scrapped with immediate effect on February 28. The measures included a buyer’s stamp duty targeting non-permanent residents, a stamp duty for second-time purchasers, and a special stamp duty for homeowners who resold their property within two years.
Since the lifting of the measures, property agency giant Midland Realty has reported a significant increase in transactions at the city’s largest housing estates. The number of transactions has reached levels not seen in nearly two years, with transaction volume more than 1.5 times higher than last year’s average.
The surge in transactions has also led to a boost in the trading performance of new properties and an improvement in the trading volume of second-hand properties. Uptown East, a new project in Kowloon Bay, sold its first round of 336 flats after receiving an overwhelming number of registrations.
Despite the increase in transaction volume, home prices have not surged as expected. James Cheung King-tat, the executive director of Centaline Surveyors, attributes this to home sellers taking a conservative view of the city’s economic prospects. However, he predicts that the property market will warm up further with anticipated “feelgood factors” later in the year.
The Real Estate Developers Association of Hong Kong has estimated that home prices could rebound by 5 to 7 percent this year, reflecting a cautious optimism in the market. As the market continues to pick up, prospective homebuyers are advised to consult with banks before making any decisions and to be wary of potentially illegal advertisements that provide misleading information.
In addition to the lifting of cooling measures, the Hong Kong Monetary Authority has asked banks to exercise caution when lending for “confirmor sales” and to ensure compliance with regulations. The authority has also implemented new measures to protect buyers of incomplete properties in mainland China and overseas, requiring real property agents to engage a lawyer to provide legal advice.
Overall, the real estate market in Hong Kong is showing signs of growth and activity following the lifting of cooling measures, with industry experts remaining cautiously optimistic about the future. Prospective homebuyers and industry professionals are advised to stay informed and exercise caution in their dealings to navigate the evolving market conditions.
