Hong Kong scraps property tightening measures to aid economic recovery

investing.com:

By Clare Jim and James Pomfret

HONG KONG (Reuters) -Hong Kong on Wednesday announced major measures to bolster its flagging real estate market by scrapping all tightening measures for residential properties, aimed at helping the city's economy which is expected to grow at a tepid 2.5%-3.5% this year.

The financial hub will cancel all additional stamp duties on transactions and waive stamp duties payable on the transfer of REIT units, Hong Kong Financial Secretary Paul Chan told lawmakers in his annual budget.

Noting challenges including high interest rates, a complex geopolitical environment as well as ballooning recent budget deficits, Chan announced a mix of measures spanning property, tourism and financial services to lure back capital, businesses and visitors to the city, as well as restore fiscal balance.

On property, long a key pillar of the economy, Chan said all demand-side management measures for residential properties would be scrapped with immediate effect.

«We consider that the relevant measures are no longer necessary amidst the current economic and market conditions,» Chan said, adding that there was room to further tweak measures for the real estate sector.

These include cutting all additional stamp duties for foreign buyers and those for the purchase of second properties, as well as on those selling flats within two years of buying, that had been imposed in the decade prior to the current slump to try to cool one of the world's priciest property markets.

In a parallel move, the Hong Kong's Monetary Authority (HKMA) adjusted measures for property mortgage loans, including raising the maximum amount homebuyers can borrow for some purchases.

Hong Kong's housing prices have plunged 20% since their 2021 peak