Exclusive | Hong Kong developer Wharf calls for ‘comprehensive review’ of property market curbs to stop the rot in home sales, prices
- Stephen Ng, chairman of the Wharf group, says a ‘comprehensive review’ is needed to remove market curbs as economic conditions have changed since 2009
- Recent easing measures are inadequate and not enough to overturn the current price slide and dire sentiment
After more than 10 years, “it is time to do a comprehensive review and [that should] involve different sectors of the community to come in with different views”, Stephen Ng Tin-hoi, chairman of the property group, said in an exclusive interview. “Then we can make an informed decision about which way to go.”
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Hong Kong developer Wharf calls for ‘comprehensive review’ of property market curbs
Hong Kong’s government slammed the brakes on the property market from 2009 douse excessive price speculation, after global interest rates fell to near-zero following the Lehman Brothers collapse. Among others, authorities tightened borrowing margins, imposed higher duties on foreign purchasers, as well as on buyers who flipped their assets within three years.
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“We strongly believe that the Hong Kong government will remove some of the harsh measures,” which could come as soon as the annual policy address next month, Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities, said in an email. “The property market has already corrected meaningfully in the past two years.”
He expects non-permanent residents with working visas to be exempted from pre-paying the existing 30 per cent extra stamp duties, and non-residents to enjoy lower stamp duties on their purchases. The government could also re-introduce its capital investment entrant scheme, he added.
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“Many people argued that it is still far from enough,” he said. “I haven’t heard anybody, or very few people in Hong Kong, saying we need these [old anti-speculation] measures to continue. I have heard a lot of people saying we need to review them.”
Henry Tang Ying-yen, the city’s financial secretary from 2003 to 2007, earlier this month urged the government to remove some of the “harsh” anti-speculation measures. Luxury homes priced above HK$30 million should be exempted from double stamp duty to help energise the market’s revival, he suggested.
Antony Leung Kam-chung, Tang’s predecessor, said a deeper decline in property prices, would hurt the banking system, adding that a crisis of confidence may lead to even greater economic issues.
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Hong Kong could emulate China’s proactive and steady approach in supporting the real estate sector after the mainland Chinese market slumped throughout the Covid-19 pandemic, given that the sector is a key pillar in the domestic economy.
“If you look at mainland China, they have also come to the view that the property market is a very important piece of the entire economy and with it, a lot of other sectors are affected,” Ng said. “So we have seen over the last few months a gradual easing of the various measures [there].”
Some industry players have argued that the government policies carried over from 2009 have outlived their purpose. They may be at odds with recent measures to attract fresh investment, foreign talent and expatriates to enhance the city’s appeal as a global financial hub.
Those old measures were imposed “in a hurry” without consultation” with the industry, Ng said. “It is time to do a proper review of those measures.”
