A man walks past a housing building in Hong Kong on August 29, 2020. MAY JAMES AFP HONG KONG A real estate executive in Hong Kong is calling for Chief Executive John Lee Ka-chiu to initiate policies that will boost demand and prices in the local property market.
The request was created to curb the decline in property prices in the city due to a weak economy and interest rate hikes.
The volume of transactions has not seen a rebound over the past few months as prices in the property market have fallen sharply. In the third quarter the number of new home transactions is expected to be around 3,600, down about 5.5 percent quarter-on-quarter, while transactions in the secondary property market are expected to see an even sharp decline, falling 28.2 percent quarter-on-quarter to 8,100 units, Midland Realty said on Wednesday.
READ MORE: HK property sales fell 20.6% in July.
Hong Kong's property price index, released by the Rating and Valuation Department on August 3, fell by 2.3 percent month-on-month to 368.2 from 376.7 in July, the lowest since February 2019. The month's contraction was the third in a row.
Sammy Po Siu-minPo Siu-min, Midland Realty's CEO for residential in Hong Kong and Macao, said the drop in property prices was due to the delay in lifting quarantine measures and the fact that property developers were pushing residential properties at low prices, increasing the pressure on secondary property transactions and property prices.
As many countries have lifted requirements for visitors to test or quarantine, the relaxation of the entry quarantine requirement to the 0 3 arrangement — no quarantine, but with three days of medical surveillance — will not provide much support to the property market, Po said.
Po called for the special administrative region government to introduce rescue measures for the property market in the Policy Address to be delivered next month, and to remove harsh measures like the Buyer's Stamp Duty BSD, which is 15 percent of the stated consideration or market value of the property, and to relax cross-border travel restrictions to curb the decline in property prices.
Many expatriates working and interested in pursuing a long-term career in Hong Kong are deterred by the high property tax they have to pay to purchase local properties, Po said. The abolition of the BSD will not only retain and attract talent, but it will also benefit the development of the local property market. As for the fourth quarter property market trend, he expects it to be subject to a number of factors including the upcoming Policy Address, market reaction after the relaxation of quarantine measures and progress in resuming cross-border travel with the Chinese mainland.
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He said that if there is good news in the pandemic prevention measures and housing policy, the first and secondhand transactions are expected to rebound to 3,800 and 12,000 in the fourth quarter, he said, and maintained his expectation of an 8 percent drop in property prices for the year.
He said that the decline in property prices may expand, while the transaction performance will be sluggish.