Residential property sales in Hong Kong have increased significantly despite the government’s decision to more than double stamp duty last month to help curb rising home prices.
Fresh data from the Hong Kong Land Registry shows that residential property sales rose 138.5% year-over-year to 6,739 units in November, which was 2.1% higher than October, with the total value reaching HK$61.6bn (£6.25bn), up 13% from October and almost doubling that of November 2015.
The latest data exceeded market expectations as many experts predicted that property sales were likely to be adversely affected in the short-term after the Hong Kong government raised stamp duties across the board to 15% in early November.
“The policy is expected to push investors into non-domestic sectors and homebuyers to the primary market, with developers offering various sweeteners to compensate for the tax payment. This, combined with seasonal effects, is expected to slow down residential sales in November and December,” said David Ji, head of research at Knight Frank Greater China.
But home prices look set to remain stable in the near term, according to Ji, as reflected by the robust residential sales following the higher stamp duty.
In March, Hong Kong’s property market reached this year’s lowest point, with home prices falling by 13% from their peak in September 2015. But during the six months from April to October, prices rose a cumulative 8.9%, according to Knight Frank’s monthly report, citing data from Hong Kong’s Rating and Valuation Department.
The ultra-luxury housing sector has remained particularly strong, as wealthy foreign buyers, particularly from mainland China, continue to invest in Hong Kong’s super-luxury property market as part of a diversified asset-safeguard strategy, despite low rental yields of around just 2%, helping to cement the city’s place as the world’s most expensive housing market.