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The world’s most expensive property market will cool down, according to Hong Kong Chief Executive Leung Chun-ying during an announcement with the city’s most senior officials.
After a short dip, the highest home prices recovered in the market. Effective Saturday, the stamp duty was raised to 15 percent by the government for all acquisitions of residential properties. These exclude the permanent residents, who are also first-time buyers. The highest tax for residents is 8.5 percent, whereas there is a 15 percent stamp duty for foreigners.
Hong Kong has the world’s highest priced property market, which is why the city lost expatriates’ interest. The overly expensive properties are projected to be a threat to financial stability, which senior officials have voiced out.
Buyers in the mainland are limiting against a weaker yuan and higher financial obligations, which made the government’s movement for making houses cheaper unfulfilled.
Louis Chan, Centaline Property Agency Ltd. Chief Executive, stated that the government is making efforts to lower down the prices of residential properties. The unexpected change will be greatly influential according to the chief executive. From five percent prices decline, Chan is now expecting an eight percent reduction. This was projected even before the change was relayed.
Centaline Property Centa-City Leading Index rose by 13 percent since its March plunge amid Chinese buyers and locals’ demand in mainland. At present, it is two percent short to meet its September record.
When the change takes effect before midnight, the potential buyers are expected complete purchases speedily according to Chan. The losses of Hong Kong’s Hang Seng Index continued by 0.6 following the announcement.
The revival of the property market is an issue for Leung. He had been foreseeing his success by cutting prices before the election in March, which will determine the next city leader for five years. Since 2012, he has been presenting a good deal of cooling down property prices. China’s decision to support him continually may depend on his record.