Lower stamp taxes on Hong Kong’s residential properties are unlikely to drive prices up despite a surge in transactions under $4m because of a persistent oversupply, analysts said.
With about 108,000 private homes forecast to come to the market in the next three to four years, developers are under pressure to keep rather than raise prices, Elliott Hau, head of financing valuation at Colliers Hong Kong, told Real Estate Asia.
"The overall impact on property prices may be limited due to the ongoing oversupply issue,” he said via Zoom.
The government cut the ad valorem duty for flats worth $4m to $100 from $60,000 on 26 February, spurring a 33% increase in transactions in March from a month earlier, Hau said.
“But the increase is not solely due to the ad valorem duty adjustment,” he said. A significant factor is the large property stock developers are holding, which is driving them to cut prices and use various marketing tools to boost sales, he added.
In March, the government dismissed claims of a residential oversupply, citing a private housing vacancy rate of 4.5% at end-2024 — in line with the 20-year average — and rising rental prices.
https://realestateasia.com/exclusive/tax-cuts-unlikely-lift-hong-kong-home-prices