Hong Kong braces for the big chill from new stamp duty

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Is buying second homes in the Chinese SAR worth the extra burden?

Songquan Deng/Shutterstock
Songquan Deng/Shutterstock

Apparently, the sale of Asia’s most expensive apartment last week was just a fluke.

Home buyers in Hong Kong are finally feeling the chill from a recent cooling measure increasing the stamp duty for second home buyers and foreign investors.

Deals for seven Hong Kong apartments, with a value of HKD55.4 million (USD7.1 million), have been cancelled, the South China Morning Post reported.

More will follow this week, warned Sammy Po, chief executive at the residential department of Midland Realty. “Buyers have decided to give up their deposits and walk away from the transactions in view of increasing market uncertainties,” he said.

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One of the biggest cancellations involved four Napa apartment units at So Kwun Wat in Tuen Mun, valued at HKD30.6 million (USD3.9 million).

Cancellations were also reported at the One Homantin development by Wheelock Properties, which sold Asia’s most expensive apartments earlier this month. The transactions involved two flats priced at HKD10.93 million (USD1.4 million) and HKD10.1 million (USD1.3 million). Both buyers didn’t proceed to complete their purchases, the website showed.

Po believes that buyers who invested in property around the time the stamp duty hike was announced have lost confidence in the market’s outlook, the Post reported.

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