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HK home sales predicted to fall after stamp duty change

By Oswald Chan in Hong Kong | China Daily | Updated: 2016-11-08 07:25

The Hong Kong government's surprise move to cool the world's least affordable home market is set to spur an immediate plunge in prices and transactions as buyers and sellers hit the pause button. A new stamp duty is expected to trigger a new round of price falls that will continue until late 2017 at earliest. Share prices of developers slumped in Monday trading.

The tax of 15 percent will be levied on all residential purchases - except for first-time buyers who are permanent residents. Until now, the highest levy for residents was 8.5 percent, while foreigner buyers already paid a 15 percent stamp duty. The changes mean foreign buyers will now pay an effective 30 percent stamp duty.

On Nov 5 and 6, the first weekend after the Nov 4 announcement, secondary home transactions decreased. Hong Kong major real estate broker Centaline Property Agency recorded seven secondary home transactions for its 10 major residential estates, the same as in the weekend of Oct 29 and 30. Midland Realty facilitated eight transactions in the same period, one transaction less than on the weekend of Oct 29 and 30.

HK home sales predicted to fall after stamp duty change

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