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The vitality of property market depends on the buying decision of new HK residents
2023-10-28
The government policy address, which was the public's longing, had been announced, and its contents were not as anticipated by the property industry. Although the spicy measures related to property market were only partially erased, however the core unfavorable elements of the measures were removed. The initial spicy measures that would levy the new Hon g Kong residents on payment 30% of the spicy tax on the transaction price. This measure was immediately abandoned, unless the new Hong Kong residents become permanent residents in the future, otherwise there is no need to pay 30% of the spicy tax anymore.
In the past few years, the overall immigrants to Hong Kong through various immigration schemes had reached 330,000, plus the 70,000 newly approved under this year's admission of talents scheme, these immigrants will become the beneficiaries of the new policy. If 20% of these new Hong Kong residents decide to become the first-time buyer soon, the demand for housing will increase to 66,000 units. This amount will be a significant factor for the property market.
The removal of the 30% spicy tax for New Hong Kong residents may be like the Free Travel Plan in 2003. Since the border reopening in that year, Hong Kong's economy had bounced back from the bottom. The withdrawal of a spicy measure against new Hong Kong residents is likely to open a free travel channel for them to purchase residential units freely. These purchasing power will finally guide the Hong Kong property market to a normal level.
Following the announcement of the policy Address on Wednesday, the Hang Seng index decreased significantly on the same trading day, indicating the industry's dissatisfaction with the contents of the policy Address. Until Friday, property stocks began to rebound, showing that the industry had realized the potential of this new purchasing power, which is expected to boost the transaction volumes.
It is anticipated that the transaction volume of the property market will begin to recover from the beginning of next month, and the downward trend of property prices will gradually be adjusted upwards. Until the end of the year, property prices are expected to be stable.
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