Hong Kong recently made a further attempt to curb property prices by introducing new measures such as adding taxes and raising down payments for certain properties.
- Homes sold within six months of purchase will now incur a 15% stamp duty.
- Homes sold within six to 12 months of purchase will now incur a 10% stamp duty.
- Homes sold within 12 to 24 months of purchase will now incur a 5% stamp duty.
- Down payments for homes worth between HK$8 million and HK$12 million have been raised from 30% to 40%.
- Down payments for homes worth at least HK$12 million have been raised from 40% to 50%.
Hong Kong house prices have risen by 50% since the beginning of 2009. The high prices, combined with a fund inflow thanks to the U.S.'s quantitative easing measures, have "distorted the market expectation regarding inflation and asset prices," says Financial Secretary John Tsang.
Some experts expect the new measures to deter speculation and lead to a cooling of house prices. There has already been an effect. The weekend after Tsang announced these new measures on November 19, sales of existing homes fell 83% from the week before.
This year, the city also stopped offering residency to foreigners who buy property and said it will increase land supply to curb prices. Tsang added that the government will monitor the market and may introduce more cooling measures if needed.