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Hong Kong stamp duty

Agents shut shops as curbs put sales on ice

Industry groups team up to call on the government to ease cooling measures, warning thousands will lose their jobs if conditions persist

PUBLISHED : Thursday, 21 March, 2013, 12:00am
UPDATED : Thursday, 07 May, 2015, 12:48pm

Property agents across the city are closing their branches as a series of government property-cooling measures continues to bite.

Investors and speculators have been forced out of the market following the introduction of the measures, leaving estate agents battling to stay afloat amid the resulting plunge in sales activity.

"An estimated 10-20 per cent of agency firms will be forced out of the market in the coming months if the situation persists," Hong Kong Real Estate Agencies General Association chairwoman Chu Kin-lan said.

Over 10 per cent of the more than 40,000 individual agents in the industry would lose their jobs because of slow sales activity, she warned.

The association has lined up with other six real estate agency associations to call on the government revive the property market.

Their members are mainly small agencies will several branches.

"Many members have told me that they have not brokered any deals since the government announced the doubling of stamp duty in February," Chu said.

She said the fallout from the measures had started hitting agents' living standards.

On February 22, the government announced a doubling of the stamp duty on residential and non-residential properties valued above HK$2 million, the latest round of property cooling measures since Chief Executive Leung Chun-ying took office in July.

That measure came four months after the government introduced a new 15 per cent tax, known as the buyer's stamp duty, on non-local and corporate property buyers to curb prices.

Chu said many of the association's members had started closing branches. For example, her company, Bo Fung Property Agency Group, has closed five branches since the end of last year, leaving six branches in the market struggling to cope with falling revenues.

"I had no choice. Business is terribly slow," Chu said.

"[The government] has not considered how we have to deal with the market slowdown. They only want to get the fame and gain more public support by launching the measures." There were 6,307 residential units lodged with the Land Registry last month, according to the government's official figures, numbers that reflected market conditions in January. And agents said the number of transactions had continued to fall since the end of February.

"You can imagine how tough the situation is," Tony Kwok Tak-leung, chairman of the Property Agencies Association, said.

Kwok urged the government to look into the issue by increasing supply and allowing investors to come back to the market.