Hong Kong’s out of control property market is finally showing signs of cooling, after four years of significant growth which had left the city with some of the world’s most expensive property prices.
According to the latest figures released by the Hong Kong Lands Registry, the volume of house sales in the city fell by 60 per cent in 2012 compared with the previous year, while at $4 billion, the combined total of these sales was down by 48 per cent on the 2011 total.
This slowdown in activity had been expected. Last year, in order to try and cool the market, the Hong Kong government announced a 15 per cent stamp duty on non-permanent residents and corporate buyers as well as a higher stamp duty on the resale of any property within three years. It also pledged to ensure that a steady supply of new housing – including public housing – is built to help ensure the supply meets demand.
What’s more, it would appear that the market is still continuing to slow this year. According to Buggle Lau, chief analyst for strategic development and research at Midland Realty, property prices are starting to fall as well.
“The average price correction has been 2 to 3 per cent from March and April — and it will carry on in May,” he told CNN. “But property prices have dropped by as much as 6 per cent between January and March for some properties already.”
Lau adds that property prices “are very likely” to continue to fall but by no more than 10 per cent. “It’s all supply and demand,” he said. “Demand has dropped significantly even as supply has stayed the same. The only option is to lower the price.”
Hong Kong properties face price correction (12th December 2012)