Hong Kong real estate prices to soften next year


That pesky stamp duty again

The future's a blur. Image: iMoStudio/Shutterstock
The future’s a blur. Image: iMoStudio/Shutterstock

Residential prices in Hong Kong are to face downward pressure in 2017 following the governments stamp duty increase for non-first time buyers, says Colliers.

The stamp duty hike on 5 November is the second increase in three years. It’s expected to cool housing prices by 5 to 10 percent over the next twelve months.

However, the price decrease will be minor and short-lived, Nicole Wong, regional head of property research at CLSA told South China Morning Post.

“Most of the buyers who incur the double stamp duty are actually upgraders,” Wong told the South China Morning Post. “If people cannot upgrade, they would not sell out of their first unit, and there won’t be any supply in the market.”

More: Hong Kong braces for the big chill from new stamp duty

Monthly transaction volumes is also expected to fall from the 8,560 total transactions in October to less than 4,000, with secondary market transactions between 1,500 to 1,800, Colliers reported.

Last week, four transactions for seven apartments worth HK$55.4 million were cancelled as a result of the hike, with buyers forfeiting their deposits.

The increase hasn’t put everyone off however, last week Property Report heard that a corporate buyer was charged with an eye-watering HKD90.54 million (USD11.7 million) on the sale of a HKD301.8-million (USD39 million) semi-detached house in Happy Valley.

Read next: Asia’s most expensive apartment just sold in Hong Kong — again