Luxury hong kong house prices cool down

Photo credit: Xopher Lance

Sales were quiet in July, according to Knight Frank’s latest report, as the market felt the impact of a series of anti-speculation policies from the Hong Kong government, including the doubling of Stamp Duty in February for all transactions over HK$2 million.

Indeed, investors and buyers have both retreated, with prices dipping 0.3 per cent and rents falling 0.9 per cent month-on-month. The proportion of mainland Chinese buyers for luxury property has dropped from 30 per cent in October last year to just 9.4 per cent in January 2013.

Thomas Lam, Director and Head of Research & Consultancy in Hong Kong, said: “Government data show that 70,000 new units could be available in the next three to four years. Of these, about 60% will be small to medium-sized units with saleable areas of less than 753 sq ft, meeting the demand from first-time homebuyers.

“However, residential supply will remain tight in the short term. With various cooling measures remaining in place, we expect the residential market to stay quiet and sales to fall about 10% in 2013. We believe mass residential prices will drop around 10%, while prices in the more resilient luxury sector will fall 5%.”