Pressure from Beijing, looming vacancy tax will force Hong Kong’s developers into faster and cheaper project launches, say analysts
- The looming tax on unsold flats and a series of Chinese state-media commentaries citing unaffordable housing as a factor in the protests rocking Hong Kong have put the city’s developers under pressure, say analysts
- Developers may price new projects at 10 to 20 per cent below the prevailing secondary market price, said Lung Siu-fung of CCB International Securities
Hong Kong’s developers are coming under mounting pressure to slash their prices and offload new projects as quickly as possible, according to analysts.
The pressure is coming from two sources: a looming tax on unsold flats, and a series of Chinese state-media commentaries last week urging the Hong Kong government to boost housing by seizing land being hoarded by developers with “vested interests”.
Downbeat sentiment stemming from the social unrest gripping the city and the US-China trade war has already forced developers to offer sizeable discounts on new flats.
Three commentaries published by mainland state media last week singled out unaffordable housing as a “root cause” behind young people taking to the streets in anti-government protests, and said the government should take back large swathes of rural land lying unused as a quick option to tackle the shortage of land for housing.
Meanwhile, the government last week said it would submit the The Rating (Amendment) Bill, better known as the vacancy tax bill, for vetting by lawmakers in October.