The government had to introduce new measures in order to stop the residential property market overheating, Secretary for Housing and Transport Anthony Cheung Bing-leung said on Saturday.
“We all remember how the Asian financial crisis hit our economy in 1997. If the government does not intervene now, there is a chance the impact could be more serious than 1997 when the bubble burst,” explained Cheung.
The new measures, announced on Friday, include doubling stamp duties across the board for both housing and non-residential properties. Stamp duty for properties valued below HK$2 million will rise from HK$100 to 1.5 per cent of transaction values.
However, first-time buyers and those not owning other residential properties will be exempt.
Cheung said: “We are facing a red-hot property market and the risk of a bubble is rising.”
Executive Council member Barry Cheung Chun-yuen, who is also the chairman of the Urban Renewal Authority, said the new measures were unlikely to affect renewal projects.
“The aim of the new measures is to cool down the market – instead of obstructing renewal projects,” he said.
Rita Fan Hsu Lai-tai, a member of the National People’s Congress standing committee, said the public would welcome the new measures. But Fan warned they also risked causing a drop in property values.