Downward Pressure on Home Sales Activity and Prices in Hong Kong as Buying Costs Increase

The Hong Kong SAR Government has introduced various measures to tighten both the supply and demand side of the frenetic local property market in an effort to stabilise it.

While observers are still awaiting the impact of the latest demand-side cooling measure – the doubling of stamp duty on properties valued at more than HK$2 million – there is considerable pressure on the supply side of the housing market.

“New supply in the private housing market is expected to average 16,750 units per year between 2013 and 2016. Although this figure is an improvement on the annual average new supply of 9,893 units over the previous six years, it is still much lower than the previous average of 27,767 units per year between 1985 and 2006,” says Joanne Lee, Manager of Research & Advisory at Colliers International. 

Besides the below-average new supply expected in the next couple of years, strong demand is also fuelling Hong Kong’s housing frenzy...

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