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Hong Kong stamp duty

Investors flock to commercial and industrial property markets

PUBLISHED : Wednesday, 27 April, 2011, 12:00am
UPDATED : Thursday, 07 May, 2015, 12:48pm


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Hong Kong's commercial and industrial property markets are expected to remain buoyant after recording rising numbers of sales and transaction values, due mainly to the additional special stamp duty levied on quick resales of residential units.

'The impact of the additional stamp duty has started to appear as some capital has moved to the non-residential market, which has directly boosted the number of sales' registrations,' said Patrick Chow Moon-kit, Ricacorp's head of research.

The Land Registry received 1,879 registrations of sale and purchase agreements for non-residential properties in the first 20 days of this month, up more than one-fifth from 1,548 cases in the same period in March, according to registry and Ricacorp Properties data. The total amount involved in the transactions rose 13 per cent to over HK$9.35 billion from nearly HK$8.25 billion.

The data confirms that the commercial property market is attracting more attention than the secondary residential market, as the latter saw a drop of 5 per cent both in transaction volumes and values to 5,271 sales for around HK$22.23 billion, in the first 20 days of the month.

In the new homes market, there were 464 registrations in the first 20 days of the month, up three per cent from 450 cases in the same period in March. Total transaction value was up two per cent to HK$6.31 billion from HK$6.19 billion.

Chow said commercial and industrial properties would continue to woo buyers. 'This is because industrial property prices are still 5 to 10 per cent lower than their peaks between 1992 and 1994, while residential prices have already surpassed their historical highs in 1997. Retail properties will still benefit from the influx of individual visitors from the mainland, and in some cases office space offers a higher rental yield than residential flats,' he said.

Chow said total registrations for sale and purchase agreements for all types of properties might reach 10,500 this month, the third consecutive month in which it would have surpassed 10,000. In the first 20 days of this month, the Land Registry recorded 7,614 sale and purchase agreements, up from 7,547 cases in the March period.

The government in November announced an additional stamp duty of between 5 and 15 per cent on flats resold within two years.

DTZ co-head of investment for China, Alvin Yip Kwok-ping, said some investors had been put off buying homes because of the stamp duty.

'The trend of investing in commercial properties should continue for a period of time until prices become too high and affect the yield,' Yip said. 'But right now prices and yields are still attractive to investors in this low-interest-rate environment.'