Demand for flats falls by half in wake of stamp duty rises
Stamp duty rises aimed at cooling market have an immediate effect as buyers and sellers adopt cautious approach, leading to big drop in deals
The latest measures to rein in Hong Kong's property market had an immediate effect yesterday, with agents reporting a 50 per cent drop in deals for flats.
They increased the commission for agents - some of whom were passing on the increase to buyers to make up for the extra duty they will pay.
"The secondary market has almost become a sleepy backwater, with sales volume plunging by more than half," Willy Liu Wai-keung, chief executive of real estate broker Ricacorp Properties, said.
"Buyers are worried they will buy something too expensive, while sellers are panicking that they may sell their flats cheaply, so they now wait and see."
Other agents said not many people were looking for flats.
On Friday, the government announced a doubling of stamp duties on home and non-residential properties valued at more than HK$2 million. Stamp duty on properties costing less than HK$2 million rose from a flat rate of HK$100 to 1.5 per cent of the transaction price.