HK Luxury Market To Remain Stable Despite Double Stamp Duty

16-Dec-2016 Intellasia | Mansionglobal | 6:00 AM Print This Post

Hong Kong residential sales overall are expected to decrease in December due to the impact of the double stamp duty and seasonal factors, while the luxury segment is poised to remain stable, according to a market report released Wednesday.

In its monthly health check of the Hong Kong real estate market, Knight Frank concluded that the Land Registry’s December data is likely to show that the government’s cooling measures are starting to take effect. The report is published ahead of official data, set to be made public in early January.

More: Hong Kong Unveils Higher Stamp Duty to Cool An Overheated Market

In early November, the Hong Kong government adopted a 15 percent standardised stamp duty across the board, except for first-time local buyers. The new stamp duty doubled what the government imposed at the rate of 8.5 percent in February 2013, when it raised the stamp duty from previous 4.25 percent. Foreigners and non-Hong Kong permanent residents have already been subject to 15 percent stamp duty since 2012.

“However, we believe that luxury residential sales remained stable as shown by the conclusion of a number of super luxury deals in the month,” said Pamela Tsui, senior manager of Research & Consultancy for Greater China at Knight Frank, in the report.

Two connected apartments in Mount Nicholson on the Peak sold in November for HK$912 million (US$117.6 million), or HK$104,803 (US$13,513) per square foot, making them the third most expensive apartments in Hong Kong, according to the report.

Residential sales remained robust in November, with sales increasing 138.5 percent year-over-year to 6,739 units, according to Land Registry data published earlier this month. The number of residential sales in November was 2.1 percent higher than October.

More: Hong Kong’s November Residential Sales Jumped 138.5 percent From A Year Ago

“November’s sales data increased compared with October’s despite the government’s stamp duty rate rise to 15 percent to suppress price growth, mainly because the figures actually reflect transactions in the previous weeks,” said Tsui.

Looking ahead, Tsui said she expected a decline in residential sales prices. “We do not expect a mild US interest-rate rise to dampen the local residential market, but abundant supply, as well as economic and policy uncertainties, may drag down mass residential prices by about 5 percent next year,” she said.


Category: Hong Kong

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