In the budget, the Financial Secretary stated that Hong Kong
is experiencing a continued upturn in the economy and demand
for residential and commercial properties has increased,
exerting upward pressure on both property pricesand rent. There
are clear reasons behind the heat of the Hong Kong property
The budget announced the lowering of the property tax rate
by one percentage point to 15% and a one-off 100% waiver of
rates for 2008/09, as well as the stamp duty on property
transfers, which has remained HK$100 for properties priced
under HK$2,000,000 and a maximum of 3.75% on properties priced
Hong Kong's position as the gateway to China is
likely to bring significant economic growth in the future with
every indication that this should positively impact on the
property market. Major transport infrastructure projects are
progressing well, in particular the governments of Guangzhou,
Hong Kong and Macao are pushing ahead with preparations for the
Hong Kong-Zhuhai-Macao Bridge.
The Hong Kong Government is also concerned about the
redevelopment of old urban areas which can release land for
better use. As such, bulk acquisitions of existing properties,
with a view to either investment or redevelopment, remain an
attractive option among developers.
According to research conducted by one of the top real
estate market analysts, the demand for residential properties
boomed rapidly, with the number of residential sale and
purchase agreements for 2007 reaching their highest annual
sales figures since 1997. The leasing market for luxury
properties remained strong through the fourth quarter of 2007
with demand coming from the ongoing expansion of the banking
and finance sector.
On the supply side, there were only 2 residential
development sites under the 2007/08 Application List sold
during the year 2007. With strong demand and declining stock,
capital values were pushed higher by the end of 2007 and will
even reach a pinnacle in 2008. The rental market will continue
to grow on the back of sustained expatriate demand and a tight
supply of leasing property.
Although there is concern with global oil prices, a slow US
economy and declining stock markets, as well as further tax
cuts on Hong Kong taxes, low interest rates and the 2008
Beijing Olympic event are all paving ways for property prices
to climb higher in 2008.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please briefly describe the main laws that govern real estate in your jurisdiction.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).