• Fri
  • Dec 26, 2014
  • Updated: 10:24pm

Hong Kong property market cooling policies should be axed: Jones Lang LaSalle

With prices still high, Jones Lang LaSalle says city should replace special stamp duty with capital gains tax to improve secondary market supply

PUBLISHED : Friday, 21 June, 2013, 12:00am
UPDATED : Friday, 21 June, 2013, 3:50pm

The Hong Kong government should scrap measures designed to cool the city's surging property market and consider replacing special stamp duty with a capital gains tax, according to Jones Lang LaSalle, the world's second-biggest real estate agency.

The government's restrictive property measures have had a notable impact on transaction volumes but little effect on curbing price increases or addressing the shortage of supply in the residential property market, said Joseph Tsang, managing director in the firm's Hong Kong office.

"It's a good time to rescind the measures," he told reporters as the company released a report on the government policies it said compounded problems by reducing supply in the secondary market.

Tsang said the market would adjust if the US dollar strengthened and United States interest rates rose, adding that the market was already at or near its peak.

His view was echoed by Centaline Property Agency founder Shih Wing-ching.

"When rental yields decline and interest rates rise, prices will fall accordingly," Shih said yesterday according to Radio Television Hong Kong. Shih also called for the government to reconsider its cooling measures.

Jones Lang LaSalle said the government should consider replacing the special stamp duty that taxes property resales within three years with a capital gains tax. That would improve supply in the secondary market and limit the losses incurred by owners who are forced to sell their properties at a discount, he said, adding that the measure would still discourage speculation.

The government should also repeal other measures, such as double stamp duty, which doubles the stamp duty on residential and non-residential purchases of more than HK$2 million. Tsang also suggested abolishing buyer's stamp duty, the 15 per cent tax on purchases of property valued at more than HK$200 million by corporate buyers or non-permanent residents.

According to Jones Lang LaSalle, Hong Kong residential property prices have more than doubled in the four years since the global financial crisis struck.

The government has announced more than 30 policy measures since 2009 to cool the market. The measures discourage owners from selling and buyers from entering the market, according to Lau Chun-kong of Jones Lang LaSalle.

Tsang of Jones Lang LaSalle said real estate funds were discouraged from investing in Hong Kong because of rising transaction costs on residential and non-residential properties.

"Some clients have deferred plans to buy office premises for their own use," he said.


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This article is now closed to comments

Jones Lang Laselle wants the government to remove the stamp duty. What a surprise!!!???
What else do you want a real estate agency to say? Never ask a barber if you need a haircut!!!
Shame on SCMP to publish such a ludicrous story; Hong Kong's property market is a GIGANTIC bubble and it will collapse when rates start to rise. There is no question about this outcome.
Then, these property developers and fancy 'real estate agents' will face the real music.
Tomorrow in the SCMP: 'Retailers Speak Out Against Consumption Tax Idea,' 'Vegetarians Say They Do Not Like Meat,' 'Tobacco Industry Thinks Smoking Concerns Are Overdone,' and other shockingly obvious news.
agree. I never understand why news media always go get opinion and publish from people with vested interests as "experts".
going to property companies for opinion on housing, going to Fed for opinion on interest rate / inflation.
get me some 3rd party independent respected opinions with a track record please.
All they are doing is asking the government to implement property measures to improve the business of property agents. They don't care about HK.
The current measures in place are very good. They have stopped the upward trend of property prices. Reduced the number of property transaction / increased down payments which will decrease owners with negative equity once prices do drop 20% once interest rates increase. This puts HK in a far better position than it was in 1997 and 2003 during the last big corrections. Let the current housing policies run through like they were intended.
The Government in HK should definitely stop, and ease off with its intervention. All that has happened is that that people are scared to either buy or sell.
Freedom to invest, trade, and yes dare I say it speculate, is vital to Hong Kong. These are the things that Hong Kong exists for and what made Hong Kong great.
What the "cooling measures" have done is stifle HK, and reduce investor confidence, both locally and externally. and destroy what for many people is the value of their most important asset.
I would suggest letting things back to normal, and letting the free market determine property prices and property developments. Also, with QE in the US now tapering off, now is probably an ideal time for the Govt in HK to ease off its property restrictive measures.
What 'Free Market' are you talking about!?
If the 'Free Market' was setting Hong Kong's interest rate, property would not have become such a massive bubble!
Over my dead body ... Why ain't sing govt doing what u have suggested


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