RAY Yuen had been patiently waiting for months for a buyer to show interest in his Hong Kong home, hoping to upgrade to a larger property for his family. Unfortunately, offers were scarce, and the ones that did come in were unreasonably low.<\/p>\n
However, everything changed rapidly. Following Financial Secretary Paul Chan’s announcement of the removal of all additional property levies, Yuen’s 340 square foot apartment saw a surge in viewings. By March 2, he successfully sold it at a modest discount that he found acceptable. The very next day, he signed a contract to purchase another property.<\/p>\n
Yuen’s experience mirrors the remarkable rebound in Hong Kong’s residential market. Buyers who had been holding back due to high borrowing costs rushed in, anticipating a price rebound after the recent policy change.<\/p>\n
In the first five days after the removal of cooling measures<\/a>, Hong Kong’s new-home sales skyrocketed tenfold compared to two months ago, as reported by Midland Realty. Henderson Land Development’s Belgravia Place project in Kowloon witnessed a frenzy, selling almost 200 apartments within hours after applications were oversubscribed by 34 times.<\/p>\n The city’s secondary home market is also experiencing a recovery, with the number of transactions in the ten largest estates reaching a 61-week high last weekend, according to Midland Realty.<\/p>\n The removal of the 15 per cent levy for foreign buyers<\/a> and the 7.5 per cent levy for existing-home owners has attracted a surge in demand. Everyone is now subject to the regular rate, capped at 4.25 per cent.<\/p>\n The urgency among buyers is fueled by past experiences, with memories of Hong Kong’s property market trends. For instance, in 2009, Yuen sold a home but didn’t make another purchase, missing out on a decade-long bull run driven by ultra-low interest rates<\/a>.<\/p>\n The removal of additional taxes has also attracted interest from non-residents, particularly mainland Chinese investors who see Hong Kong as an attractive destination for property investment, given the relatively lower tax rates compared to other overseas cities.<\/p>\n Despite the optimism among buyers, analysts are less convinced that home values will rebound soon. High interest rates and an abundant near-term supply may pose challenges to the recovery of Hong Kong’s home prices.<\/p>\n While the market remains uncertain, some buyers view the current scenario as an opportune time to enter the market, capitalizing on the considerable decline in home prices from their peak.<\/p>\n