Hong Kong is anticipated to announce reduced stamp duties for certain property transactions in its annual policy statement. Chief Executive John Lee revealed that the focus would be on stimulating the economy and improving livelihoods.
In the property market, Lee is expected to trim stamp duties for some transactions, although not all. The business community and homeowners have been calling for a rollback of cooling measures implemented over the past decade to curb speculative activities.
Property prices surged nearly 300% in the decade leading up to 2019 but fell 13% since then, driven by factors such as anti-government protests, the COVID-19 pandemic, and a national security crackdown.
Transaction volumes have decreased in both the luxury and broader property markets, leading to concerns about negative equity cases.
While relaxation of certain stamp duty measures may restore confidence among buyers, property prices are expected to fluctuate for a while, according to Rosanna Tang, Hong Kong head of research at Cushman & Wakefield.
Despite these challenges, Hong Kong’s economy is projected to grow by 4.0% in 2023 after contracting by 3.5% in 2022. The city is also facing demographic challenges, including falling birth rates.
In his policy statement, Lee is expected to emphasize the importance of maintaining tight national security measures. Further security legislation, including anti-espionage laws, is expected to be enacted in the near term.
