Investors rush for office space as stamp duties cool market
Brokers expect commercial property prices to rise in face of residential stamp duties, but government may intervene there, too
Property agents say they expect investors to retreat from the housing market as a result of the stamp duties announced on Friday, and move into an already sizzling commercial sector.
But the government may be willing to block that avenue as well.
"The government's latest round of cooling measures will speed up investment in non-residential properties. Owners of office space in Kowloon East have already raised their asking prices by 15 per cent," said Choi Ming-chor, deputy sales director at Centaline's Commercial, Industrial and Shops unit.
Financial Secretary John Tsang Chun-wah said in Beijing that he would keep a close watch on the new measures, adding they might apply to commercial units if needed. Asked if the government would raise the stamp duty again, he replied: "We will review the measure, but we haven't set any review period."
Analysts expect the government to impose a mortgage tax and capital gains tax if the measures fail to stabilise home prices.
Commercial property in the city has been heating up for some time. Two weeks before the new measures, Hebei Iron & Steel (Hong Kong) International Trade Company paid HK$28,160 per square foot, or HK$386.3 million, for a property in Queen's Road Central. That broke a record for office space - HK$27,550 per sq ft at Bank of America Tower, Admiralty - set days earlier.
Choi expects to see more record deals in the office market in view of the city's "limited investment alternatives". He said a 1,812 sq ft office unit sold for HK$7,148 per sq ft, or HK$12.95 million, at Chevalier Commercial Centre in Kowloon Bay, making it the most expensive in the building at the weekend, right after the measures were announced.