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Hong Kong stamp duty

Hong Kong flat sales take hit from cooling measures

No homes were sold in 18 housing estates in week after the government raised stamp duty

PUBLISHED : Wednesday, 06 March, 2013, 12:00am
UPDATED : Thursday, 07 May, 2015, 12:50pm

Hong Kong home sales took a hit last week from the latest round of measures to cool the market, with no transactions recorded in 18 major housing estates.

Just 38 properties were sold in the 35 major housing estates monitored by real estate agency Midland Realty between February 25 and March 3. That was a 40 per cent drop from the preceding week.

"More than half of the housing estates we monitor achieved zero transactions," said Midland Realty chief analyst Buggle Lau Ka-fai. The estates included some of those popular with buyers, such as South Horizons in Ap Lei Chau, Chi Fu Garden in Pok Fu Lam, Parc Oasis in Yau Yat Chuen and Telford Gardens in Kowloon Bay.

"Many potential buyers became more cautious after the recent tightening measures and adopted a wait-and-see approach," BNP Paribus Securities (Asia) said in a report issued yesterday.

On February 23 the government doubled stamp duty on the purchase of all properties sold for more than HK$2 million to as much as 8.5 per cent. The move was the third in a series of measures rolled out to cool the city's real estate market since Chief Executive Leung Chun-ying took office in July.

Home prices have doubled in the past four years, helped by low mortgage rates, an influx of mainland Chinese buyers and a lack of new flat supply.

However, despite the poor overall performance of the market last week, there were a small number of record-breaking deals reported by property agents, driven by the eagerness of some first-time buyers to buy small and mid-sized homes. One buyer paid HK$5.7 million for a 617 sq ft flat in Tseung Kwan O Centre, or more than HK$9,200 per sq ft, the most ever paid per square foot on the estate.

"Some buyers probably expect the Hong Kong currency to drop rapidly in the wake of the quantitative easing in the United States. The impact on the Hong Kong property market, they believe, will be greater than that from the cooling measures," said Patrick Chow Moon-kit, research head of Ricacorp Properties.

But record-breaking deals were few and far between. Just 61 new homes were sold on March 2 and 3, the same as the previous weekend. Of these, 39 were in Henderson Land and New World Development's The Reach in Yuen Long.

Meanwhile, developer Hong Kong Ferry (Holdings) obtained pre-sale consent for its Green Code development in Fanling, in the New Territories last week and plans to launch sales of flats there this month at an estimated average price of HK$7,000 per sq ft of gross floor area. The project has 728 flats with gross floor area of between 380 and 1,880 square feet.