Property News · January 11, 2017

Why Hong Kong prices won’t stop rising in 2017


No worries, no (downward) pressure despite stamp duty
The Central-Mid-Levels escalator and walkway system in Hong Kong is the longest outdoor covered escalator system in the world. Pelikh Alexey / Shutterstock.com
Analysts do not expect home values in Hong Kong to stop rising this year, new stamp duties notwithstanding.
Despite the chill factor of the new levy, the Chinese SAR’s residential market is expected to show resilience, thanks to robust demand and other economic indicators.
“I cannot foresee any downward pressure driven by the new stamp duty policy as the M3 is up to a new high exceeding HKD12 million (USD1.5 million),” Vincent Cheung, executive director at Colliers Hong Kong, said. “The overflow of cheap money after the quantitative easing of various countries and the expectation of further depreciation on the renminbi attracted the Chinese buyers to continue buying properties in Hong Kong and overseas countries.”
Cashed-up home buyers drove sales in the Hong Kong primary market to their highest level since 1995, data from the Land Registry showed last week. Hong Kong values stand to scale new heights since the stamp duty is largely designed to curtail secondary, speculative demand.
More: Why secondary home sales in Hong Kong are feeling the chill
On 5 November, the Hong Kong government increased the stamp duty to 15 percent for all non-first-time home buyers.
“The impact of the measures on the primary market will likely be mild because developers can offset the extra stamp duty costs with various subsidies,” Alva To, senior managing director of DTZ C&W in Hong Kong, told the South China Morning Post.
The primary market could be inured to headwinds since Hong Kong developers are known to increase asking prices by a considerable margin to offset the cost of stamp duty rebates.
“For the primary home sales, most of the developers would provide allowances for the buyers to settle the new stamp duty, and the developers can easily offer top-up mortgage for the buyers,” Cheung said. “In addition, the developers would bear the agency costs for the primary home sales.”
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Source : property-report.com
Read more…Why Hong Kong prices won’t stop rising in 2017

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