Residential sales in Hong Kong increased in November despite an increase in stamp duty for not first time buyers, the latest data shows.
In a bid to reign in rising home prices and help first time buyers get on the housing market the Hong Kong Government raised the stamp duty rate for non first time buyers to a standardised 15% in early November.
But there was no immediate impact, according to the analysis report from international real estate business Knight Frank, but it did say this could be because the figures from the land registry do not yet reflect the change.
It says that it is likely that there will be a fall in sales when the December figures are published in January 2017 as the stamp duty change and seasonal slowdown takes effect.
The report also shows that primary sales were quiet in November, with limited new launches, as the market was absorbing the impact of the stamp duty rise. The super luxury sector, however, remained strong, with two connected units in Mount Nicholson on the Peak selling for HK$912 million, or HK$104,803 per square foot, making them the third most expensive apartments in Hong Kong.
From now until 2020, the average annual number of residential completions is expected to reach about 20,000 units and Knight Frank does not expect a mild interest rate rise in the United State to dampen the local residential market.
But the report points out that abundant supply along with economic and policy uncertainties, may drag down mass residential prices by about 5% next year.
‘Given the relative scarcity of stock, luxury residential prices will remain stable. Home rents are set to move upwards next year, with some potential home buyers shifting to the leasing market given home unaffordability,’ the report adds.