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Hong Kong property

Home-purchase confidence in Hong Kong nosedives as property prices continue to climb

City University poll also shows dip in confidence in consumer prices last quarter

PUBLISHED : Monday, 09 January, 2017, 4:08pm
UPDATED : Monday, 09 January, 2017, 4:25pm

Home-purchase confidence in Hong Kong took a nosedive of about 21 per cent last quarter as already sky-high property prices continued to rise despite a recent drastic increase in the punitive stamp duty.

According to a poll of 1,007 participants by the statistical consulting unit of City University’s Department of Management Sciences last month, confidence about home buying plunged to 45.1 points, compared to 57 in the third quarter of last year. This was also the lowest confidence level recorded in 2016.

A score of below 100 points, on a scale of 200, means respondents were dissatisfied with the spending market.

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“The findings showed Hong Kong consumers’ biggest worry was still about home buying,” said pollster Geoffrey Tso Kwok-fai, associate professor in the university’s Department of Management Sciences.

Despite a drastic increase in the stamp duty on property transactions for non-first-time buyers to 15 per cent from 1.5 per cent in November, he said, property prices had not been reined in so far.

“We can see that transactions have slackened and the second-hand property market has been very weak. Still, housing prices have not stopped rising,” Tso said.

Hong Kong raises stamp duty to tame surging home prices in the world’s least affordable city

Meanwhile, confidence in consumer prices also dropped by 5.6 per cent to 68.8 points compared to the previous quarter.

Confidence in the city’s economic development remained steady at 88.3 points, a drop of 1.6 per cent. The indices on stock investment and employment were 81.9 points and 99.3 points respectively, showing a drop of 2.8 per cent for the former from the preceding quarter.

The survey also tracked consumer confidence in mainland China, Macau and Taiwan. The mainland was the most upbeat about consumer spending at 101.8 points, followed by Macau at 83.6, Hong Kong at 81.5 and Taiwan at 77.2.

Overall consumer confidence dropped by 2.1 points in Macau, 3.6 points in Hong Kong and 4.1 points in Taiwan, with China registering a rise of 1.9 points compared with the third quarter of 2016.