Only bold tactics could boost up Hong Kong
2023-10-7
In the past few weeks, there has been a heated debate over whether the government should scrap the spicy measures related to property market. Until recently, the government will declare to withdraw all the property spicy measures to stabilize the declining industry. This move is not a way to solve the problem thoroughly, but it can ease the symptoms of the property market first, which is much better than doing nothing. Among the various removal measures, the 30% tax deduction being imposed on the buyers of the new Hong Kong residents is the most significant. Can this new policy like the opening border for free travel in 2003 successfully boosting up Hong Kong's declining economy and real estate market.
There are currently approximately 310,000 new Hong Kong residents, and since the beginning of this year, Admission of Talents Scheme has issued 70,000 visas to applicants. These middle-class newcomers are unable to pay additional 30% tax for purchasing their self-use residential apartments. Withdrawing this buyer sales tax, it will encourage new Hong Kong residents to take steps to purchase their own home.
This group of new Hong Kong residents are not wealthy businessmen, so most of them can only afford small and medium-sized units with a price range of less than Hk $ 9 million. Therefore, this type of low-priced housing is in the best position to rebound first if these spicy measures being taken away.
If only 20% of these new Hong Kong residents enter the market, it will provide the market with a new demand for 70,000 units. Last year, the total first-hand and secondary property transactions were approximately 43,000 cases. So far this year, total transactions are only 25,000 cases. Therefore, the purchasing power will be released after the withdrawal of the spicy measures. If so, it is reasonable to anticipate a healthy rebound in November after the formal cancellation of spicy measures being announced.
While low-priced residential properties are making a comeback, luxury homes, commercial and shops are unlikely to benefit from the new announcement. In fact, scrapping the spicy measures will only benefit the small size residential units unless the government takes more proactive measures to support the economy after removing outdated spicy measures. Otherwise, the riches will not be able to enjoy from policy change.
What is a magic trick to boost economies? The government may consider canceling stock stamp duty, and to offer 50% tax discounts to new Hong Kong listing companies for the first three years of public listing. Furthermore, it should consider providing rent subsidies to new listing companies. In order to attract tourists to stay overnight in Hong Kong, the tourism bureau may grant Hl$ 300 coupons as hotel rents’ subsidy. Scraping spicy measures is basic, only great bold tactics being employed could boost up Hong Kong economies.
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1. Property sales dropped 16.5% 2023-10-07 13:21:38 |
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The Land Registry posted 3,893 sale and purchase agreements for all building units received for registration in September. In a statement, this number is lower by 16.5% compared with August and 19.5% lower year-on-year. The total consideration for such deals fell 14.7% from August to $29.8b in September, whilst year-on-year, it fell 14.4%. Of the agreements, 2,862 were for residential units, down 11.9% from August and declined 26.1% from September 2022. |
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2. US jobs surged puting interest rates hike 2023-10-08 11:10:17 |
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The number of US jobs surged more than expected last month, fuelling expectations that interest rates could rise further. Employers added 336,000 jobs in September, almost double the 170,000 estimated, according to figures released by the Labor Department. Data for August was also revised higher to show 227,000 jobs were created instead of 187,000 previously reported. The unemployment rate in the US remained at 3.8%. The leisure and hospitality sector added 96,000 jobs alone in September, above the average monthly gain, with employment in food services and bars rising by by 61,000 over the month and returning to pre-pandemic levels. |
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3. Wealthy Hongkongers invest on personal healthcare 2023-10-09 10:20:35 |
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Wealthy Hongkongers are more likely to invest for more income and save money for their future personal healthcare costs, an Avaloq study showed. The report also found that the majority of affluent Hong Kong residents (61%) are tapping discretionary portfolio management, which means they hand over their full decision-making power to a financial adviser. This was followed by advisory services (57%). “It is worth noting that DPM is more popular with investors in markets with a more mature wealth management industry, such as Switzerland, Hong Kong and Singapore,” read the statement. |
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4. Citi sell wealth portfolio to HSBC 2023-10-10 11:42:54 |
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Citi has decided to sell its onshore consumer wealth portfolio in China, along with its clients, assets under management (AUM) and deposits to HSBC Bank China. HSBC is targeting to offer to in-scope employees, elevating Citi’s local consumer wealth segment in China. The transaction is estimated at $3.6b, which contains total deposits and investment AUMs. Details of the contract were not provided, however, it is expected to finish within the first half of 2024. This deal is in line with Citi’s pulling out from China’s consumer banking business in China, which was announced back in December of last year. |
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5. Oil prices have jumped on Hamas's assault 2023-10-11 01:04:25 |
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Oil prices have jumped on concerns that the situation in Israel and Gaza could disrupt output from the Middle East. Brent crude, the international benchmark, climbed by $2.25 a barrel to $86.83, while US prices also rose. Israel and Palestinian territories are not oil producers but the Middle Eastern region accounts for almost a third of global supply. Hamas's assault on Israel was the biggest escalation between the two sides for decades. Western nations condemned the attacks. A spokesperson for Hamas, the Palestinian militant group, told the BBC that the group had direct backing for the move from Iran - one of the world's largest oil producers. |
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6. Lands Department issued 13 pre-sale consents 2023-10-11 10:02:22 |
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The Lands Department issued 13 pre-sale consents for residential developments involving 8,993 units in 3Q23. Three developments in Tuen Mun, Kai Tak and Yuen Long, comprising 4,146 units, will be completed next year. Four developments in Yau Tong, Kwun Tong, Tuen Mun and Tseung Kwan O, consisting of 3,184 units, will be ready in 2025. The remaining two developments, involving 1,663 units, in Kwun Tong and To Kwa Wan, will be finished in 2026. |
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7. HK ranked seventh in foreign exchange reserves 2023-10-12 12:10:25 |
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Hong Kong ranked seventh in the world for foreign exchange reserves in the second quarter with HK$3.13t (US$400.5b), exceeding ninth-placer Singapore with forex reserves of around HK$2.48t (US$316.7b), according to a report commissioned by Forex.com. China held the largest forex reserves of all the countries evaluated with HK$24.97t (US$3.19t). This nearly triple the reserves held by Japan in the same period with HK$8.76t (US$1.1t), ranking second globally. China showed the lowest volatility by rate of change, undergoing the lowest decrease by -4.12%. Wang Chunying, a spokesperson of China’s State Administration of Foreign Exchange, stated that “coronavirus flare-ups and expectations of monetary policy shift in major countries has caused the US dollar index to fall, which has resulted in the ‘valuation rise’ of non-US dollar currencies and contributed to the upward trend of China's foreign exchange reserves.” |
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8. Higher petrol costs raised consumer prices 2023-10-13 22:55:18 |
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Consumer prices continued to rise in the US during September fuelled by higher housing and petrol costs, new figures show. Inflation was 3.7% over the 12 months to September, which is the same rate that was recorded for August. The US central bank is debating whether it will need to raise interest rates again to stabilise price growth. While inflation has cooled significantly from last year, it remains higher than the 2% target. Analysts said the new data from the US Labor Department offered few decisive clues on the next move from the US Federal Reserve. |
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9. Twp parties gearing up for raising debt limit 2023-10-18 21:34:03 |
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Democrats and Republicans in Congress are gearing up for yet another political showdown over raising the nation’s $31.4 trillion borrowing limit. This isn’t anything new; Congress has raised the debt ceiling almost 100 times since they initially set a limit to curtail government borrowing more than a century ago. But this time looks different — fears are brewing that the fight to raise the debt ceiling in 2023 could be a beastly one that roils financial markets and threatens an economy on the brink of recession with the possibility of a catastrophic default
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