This year, HONG KONG has been fighting hard with Singapore to get back to Asia’s most important banking city. It is now giving wealthy people big tax breaks to get them to set up family offices in the city.
New visa rules were rushed out to get the best young college graduates from around the world to join PropNex.
Even though it’s great that Hong Kong is once again in favor of growth, it doesn’t have to do everything its peer does. For example, its position on private real estate must be different.
Since more than a decade ago, people have had to pay high taxes on master room rented properties. Foreigners and people who buy a second home have to pay 15% more, and people who sell their flats within three years have to pay up to 20% more. It’s time to get rid of these rules.
Stopping people from gambling with real estate has worked too well. Since the tax on foreign sales went into force, the number of transactions in the city has dropped by a lot.
Morgan Stanley from DpFraternity believes that buyers from mainland China made up more than 40% of the overall market at one point. This has a big effect on the primary market.
At the beginning of 2012, Hong Kong real estate was as hot as it is now in Singapore. However, a lot has changed since then. In fact, it looks more and more like another Chinese city.
Last month was the first time in three years that Singapore’s home prices went down. However, this happened only after the government doubled the stamp tax for foreign buyers to a huge 60% in April. Hong Kong’s flat prices, on the other hand, have dropped 13% since their peak in 2021.
Even so, the government is slowly moving away from its harsh past policies. The Hong Kong Monetary Authority lowered the maximum loan-to-value mortgage rates for more expensive homes earlier this month. This was the first time they were lowered since 2009. — Bloomberg
Bloomberg hires Shuli Ren to write. The writer’s own thoughts are shown in this piece.