Proposed easing of stamp duty isn’t helping sales, property agencies say

Agents say they are mired in the darkest days of the market correction and that the new government measures are not boosting transactions

PUBLISHED : Tuesday, 20 May, 2014, 3:03pm
UPDATED : Wednesday, 21 May, 2014, 1:38am

While developers and buyers wishing to upgrade their homes are likely to benefit from the government's proposed relaxation last week of the rules on the double stamp duty, property agents are singing the blues.

They say these are the darkest days of the market correction so far, as sales of new homes slump to a 12-month low.

Their income from commissions has fallen as developers hold back on the launches of new projects and homeowners offer less room for negotiation after the proposed easing of stamp duty on some transactions.

"Only 176 new units have been sold so far this month. It is the lowest since about 80 deals were recorded in June, after the new rules regulating the sale of new projects took effect on April 29 last year," said Louis Chan Wing-kit, managing director for home sales at Centaline.

Assuming a supply of 15,000 new flats a year, Chan said, the average number of transactions per month should be 1,250. He said a quarter of Centaline's 320 branches have sunk into the red so far this month, though the company broke even.

Chan said the firm would not rule out the possibility of laying off staff to cut costs.

Now, buyers of a new flat can get a refund of the extra stamp duty if they sell their existing flat within six months of signing a temporary contract for the purchase.

Under the proposed terms announced by the government on May 13, the six-month period would start only when an official contract is signed.

For buyers of second-hand flats, the period would be extended to seven or eight months. In the primary market, the buyer can have up to 36 months to sell an existing flat and still get the exemption, because developers can offer projects for pre-sale 30 months before completion.

However, developers have not rushed to offer projects.

Cheung Kong (Holdings) has no definite sale date for its joint venture, the 1,717-unit City Point in Tsuen Wan, although it had a soft launch three weeks ago.

Meanwhile, Swire Properties is inviting the public to tender for three flats in Opus Hong Kong, a luxury project in Stubbs Road. The flats, ranging from 5,199 square feet to 5,409 sq ft, are expected to fetch between HK$350 million and HK$370 million each. Tendering will close on June 27 at noon.

In the secondary market, owners see it as the start of government moves to lift its market-cooling measures and are standing firm on prices, Chan said.

"Home sales in the secondary market will turn sluggish as a result of a big gap in price expectations between buyers and sellers that has made negotiations more time-consuming," he said.