Hong Kong property prices to fall further, government should reconsider extra stamp duties, CPA Australia says

Name: As mainland China reopens, what is the market outlook for the mainland and Hong Kong?
Uploaded: 2022-12-13T23:30:09.000Z
Duration: 11 min 31 s
Description: As mainland China reopens, what is the market outlook for the mainland and Hong Kong?

The government should consider reviewing the extra stamp duties on property transactions, CPA Australia executive says

Survey respondents’ pessimistic outlook for property market contrasts with their views on city’s economy, firms’ revenue outlook and job market

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Residential buildings in Hong Kong. The survey, conducted in November, polled 210 respondent accountants and finance professionals, of which about 54 per cent anticipated home prices would fall next year. Photo: Bloomberg

Eric NgandSalina Li

Published: 7:30am, 14 Dec 2022

Hong Kong property prices are tipped to fall further in 2023 even as the economy improves, according to a survey conducted by CPA Australia, which also said it is time for the Hong Kong government to reconsider its property sector cooling policies.

The survey, conducted in November, polled 210 respondent accountants and finance professionals, of which about 59 per cent said they expected retail shop prices to fall next year. About 56 per cent believed office prices would decline too, 54 per cent anticipated home prices would fall, while 52 per cent made the same forecast for industrial properties.

“The government could consider reviewing the extra stamp duties on property transactions, and setting out plans to boost tourism,” Eden Wong, CPA Australia’s divisional president of Greater China, said in a statement on Tuesday.

The Hong Kong government has since 2010 levied a slew of stamp duties on residential property transactions. The Hong Kong Monetary Authority, the city’s de facto central bank, has also imposed rules on home loans to dampen investment demand and runaway prices, and contain financial risks.

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As mainland China reopens, what is the market outlook for the mainland and Hong Kong?

This is because the prices of lived-in homes in Hong Kong increased by 160 per cent from 2010 to 2021, according to a government index tracking the segment. As of December 4, however, they have plunged 17.6 per cent since a peak in August 2021, based on the Centa-City Leading Index, a gauge of lived-in home prices compiled by Centaline Property Agency. Moreover, the agency expects this gauge to decline further by late January, extending the decline to nearly 25 per cent.

“We think homebuyers will take a wait-and-see approach, unless either sellers soften their tone on pricing or the US Federal Reserve softens its tone on interest rate hikes,” Jieqi Liu, an analyst at brokerage firm UOB KayHian, said in a research report released on Tuesday.