Hong Kong Developers Hasten Sales Launches Amid Market Uptick
November 10, 2023
Hong Kong’s property market is experiencing a positive shift as developers hasten their sales launches to clear inventory. The market sentiment has improved after Chief Executive John Lee Ka-Chiu announced the relaxation of certain stamp duties in his Oct. 25 policy address. However, agents emphasize that low prices are crucial to enticing buyers in the overall negative environment.
Consultants reveal that sales of numerous new property projects had been put on hold since late September due to speculation regarding the government’s potential easing of long-standing cooling measures. These measures have traditionally increased the cost of purchasing a home. The market responded positivity to Lee’s announcement, with property agents reporting 182 new home sales in the seven days following the policy address.
According to Midland Realty, the primary market saw a total of 326 transactions in October, marking a 32% increase from September’s lowest total of 274 cases this year. However, this figure still falls significantly below the peak of 2,100 transactions recorded in March. Developers are now focusing on selling remaining units from previously launched projects, with approximately 600 new home units set to be put on sale in November. Property agents anticipate that total primary-market transactions in November will reach 1,300 to 1,500.
The reduced uncertainty surrounding the government’s stance on cooling measures has motivated developers to actively sell their projects. Chau Kwong-wing, chair professor and director of the Ronald Coase Centre for Property Rights Research, explains that developers are more optimistic now. The recent relaxation includes having the buyer’s stamp duty to 7.5% for non-permanent residents and residents buying a second or additional home. Eligible overseas talent is also exempt from paying stamp duty unless they fail to become permanent residents.
However, developers remain cautious about the overall market outlook, emphasizing the record-high number of first-hand private residential units potentially available in the nest three-to-four years. The Housing Bureau reported an increase of 2,000 units by the end of September, bringing the total to a record high of 107,000 units. JLL predicts the completion of 6,400 private residential flats in the fourth quarter.
Despite the challenges, recent sales of discounted new flats demonstrate the continuous strong demand for housing in Hong Kong. To sell more units, developers must offer attractive prices and find innovative ways to attract homebuyers. Some developers are implementing strategies, such as promising refunds if home prices fall within a specified period . Market experts believe that the first-hand market will continue to draw demands, with sales volume rebounding in Nov. 2023, while prices in the secondary market face further downward pressure.
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