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  • Jul 26, 2014
  • Updated: 1:27am

15 per cent stamp duty

To rein in the city's runaway housing prices, Hong Kong's Financial Secretary John Tsang Chun-wah announced an additional 15 per cent stamp duty on non-permanent-resident and corporate buyers starting from October 27, 2012. The move prompted speculation over the effectiveness of taxation on the real estate market and criticisms that Hong Kong was turning away from its roots as a free market economy in favour of a more protectionist market environment.

 

NewsHong Kong
HOUSING

Hong Kong housing prices soar despite cooling steps

Kowloon apartment expected to fetch HK$220m despite government bid to cool property market

PUBLISHED : Wednesday, 05 December, 2012, 12:00am
UPDATED : Wednesday, 05 December, 2012, 10:30am

Fewer homes are being sold and mortgages taken out thanks to the government's housing measures, but the steps have not put the brakes on prices.

A potential buyer is in talks to purchase a 3,465 sq ft flat in The Arch development at Kowloon Station, said Centaline Property Agency, which is arranging the transaction. It declined to identify the potential buyer and said the price was still being negotiated, but talk in the market is that the sale price is about HK$220 million, or nearly HK$63,500 a square foot.

If the deal is sealed for that amount, it will set a new record in terms of price per square foot for apartments in Hong Kong.

"Some investors are willing to pay a premium for some unique properties, regardless of the concern over tougher regulations," said Jeff Chung, assistant sales manager of real-estate agent Hong Kong Property Services (Agency). "There is a very limited supply of units of more than 3,000 square feet in Kowloon."

Nevertheless, overall market sentiment remains weak, weighed down by the introduction of new stamp duties from October 27. The measures include a 15 per cent additional stamp duty on purchases by corporate and non-permanent-resident buyers.

The government also raised by five percentage points a special stamp duty on sellers that was introduced two years ago to curb speculation, and extended its effect on resales to three years. The rates now range from 10 to 20 per cent.

There were 571 flats sold at 50 housing estates in November, the lowest monthly sales recorded so far this year, according to a survey conducted by real estate agent Ricacorp Properties. That is a drop of 53 per cent from October, when 1,210 flats changed hands.

Meanwhile, the number of mortgages registered for resale home purchases fell 32.5 per cent in the first 11 months of the year from the same period in 2011 to 81,766, according to mortgage broker mReferral.

mReferral chief economist Sharmaine Lau expects the higher stamp duties to continue to hit buyer sentiment, resulting in weak demand for mortgages.

However, mortgage applications for car parks skyrocketed last month.

Prior to the new stamp duties, applications for car-park mortgages usually accounted for 2 or 3 per cent of total mortgage transactions, Lau said. "Our preliminary figures show that car-park mortgage applications accounted for 24 per cent of total applications in November."

Looking ahead, property consultants Savills expects to see a moderation of price and rental growth across most real-estate sectors next year. "In the residential market, policy risk will remain as the government attempts to stabilise the sector before new supply comes on line from 2014 onwards," it said.

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This article is now closed to comments

lucifer
I cannot wait until this whole thing blows up. Actually, I am even more excited to see the dumbfounded looks on HK government officials as the property explosion ripples through the entire economy.
Of course I am not wishing misfortune on anybody, but at this point its a forgone conclusion. Measures that could really help will never be taken because of politics and vested interests. So, if you have money saved…look forward to a cheap apartment - when? Who knows…….?
hybrid713
Articles like these really bugs me with deceiving headlines and making premature conclusions by generalizing the market with a extraordinary transaction. This is simply a report of a potential massive deal which belongs in gossip/showbiz column.
On a separate note mortgage for car parks does worth a mention. I am glad speculators are gambling on something that doesn't hurt majority of HKers. Though our artificially low interest rates will always create as asset bubble.
artdig18
The headline is eye catching but the subtance is not there. The property at the Arch is not transacted and car parking space is not truly housing ... but some may thing it is.
donniemcm
I think news about property market should be categorized.
Luxury market has a premium that makes "mass" market price out of its range.
Sometimes it's a shortcut or a stimulation to integrate the luxury market with the rest.
 
 
 
 
 

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