Higher stamp duties, interest rates will not increase ‘distressed’ property asset sales in Hong Kong, analysts say

The number of distressed property assets in Hong Kong will remain low, despite the recent stamp duty hike and likely interest rate rise later this week, analysts say.

Distressed assets – those that owners are forced to sell at lower-than-market prices for reasons such as bankruptcy or debt – are “extremely scarce” in Hong Kong, according to Charles Chan, managing director of valuation and professional services at real estate services provider Savills.

Whenever these assets arise, property speculators or investors are eager to acquire them, he said.

“But we haven’t see any substantial increase in the number of distressed assets for the time being because property owners appear to have strong holding power,” Chan told the Post.

This relatively strong holding power comes thanks in part to the low interest rate environment, according to Vincent Cheung, executive director of Asia valuation and advisory services at Colliers International.

But even if the US Federal Reserve increases interest rates for the second time in a decade at its two-day policy meeting this week, the 25 basis points by which interest rates are expected to rise is “not substantial,” he said.