Market for cheaper flats expected to recover faster than luxury segment
Agents are expecting most of the sales activity to focus on flats worth around HK$4 million or below as new stamp duty starts to take effect
The mass home sector is expected to return to normal faster than the luxury home segment, with activity expected to focus on flats worth HK$4 million or below, say property consultants.
Sales of homes worth HK$20 million or higher froze over the weekend, but demand among first-home buyers stayed healthy despite higher property tax as they took advantage of discounts.
"We have seen a handful of flat viewers come out to look for flats at or below HK$4 million," said Ken Lee, senior regional sales director at Centaline Property Agency's Tseung Kwan O branch. Under a new tax rule, stamp duty for flats between HK$3.29 million and HK$4 million rose to 4.5 per cent, from 2.25 per cent, and 6 per cent for flats between HK$4.42 million and HK$6 million. The revised stamp duty will not apply to local first-time homebuyers.
On Sunday, the branch helped a buyer purchase a 515 sq ft flat at The Metro City, in Tseung Kwan O, for HK$3.98 million, slightly lower than prevailing prices of around HK$4.2 million.
He said one of his clients, a retiree who lives in Shenzhen after selling his apartment years ago, is again looking in Hong Kong for a long-term investment.
"As he will not be affected by the extra stamp duty, he wants to buy a 500 sq ft flat for HK$4 million or below. This can fetch a monthly rental of HK$12,000," he said, adding it could yield an annual return of 3.6 per cent.