The new measures to cool property prices are likely to curb speculation in the non-residential market and lead to a fall in prices, property agents said. But they generally expect a decline of less than 10 per cent.
Tony Lo, head of the retail shops division at Midland, said: "Speculators in the non-residential market will disappear. We won't see the confirmor sales," referring to deals in which the property is resold before the original transaction is completed.
Prices for non-residential properties are usually higher than for residential flats. Thus, buyers face a higher investment cost after the stamp duties announced yesterday are factored in. "Also, the sellers would not ask for a crazy price for their retail properties," he said. "But I think the prices of retail properties will fall less than 10 per cent."
Veteran retail property investor Michael Wong, said he spent about HK$1.5 billion buying retail properties last year. "The measures will hit the non-residential market," he said. "The investment cost will be much higher. I will cut in half my budget for retail property investment this year."
However, he said he didn't think prices would drop so much. At most, prices wouldn't rise.
Joseph Tsang, managing director of Jones Lang LaSalle, said the market would be quiet in the short term.
"There are more irrational or panicked investors in the non-residential market," he said. "They will be willing to cut their asking prices. Prices of non-residential properties will fall up to 5 per cent."
Alvin Yip Kwok-ping, co-head of investment for China for the property consultancy DTZ, said the measures would affect the sale of small shops within larger shopping arcades. "It would dampen the investment demand," he said.
"The investors who bought car-parking spaces and hotel rooms would be affected as well [when they planned to resell their properties]," he added.
He said the non-residential market would be slower in the short run.
"But it will turn active a few months later," Yip said.
"It's not the end of the world. Singapore has released a few rounds of cooling measures but it is still unable to cool down the market. Property prices will not fall unless the United States raises interest rates."
He said investors may buy non-residential properties via company acquisition.
"They need to pay stamp duty of only 0.1 per cent if they buy the company," he said.