Hong Kong Chief Executive, John Lee, announced a series of measures aimed at boosting the struggling real estate sector and jump-starting the city’s economic activity during his annual policy address delivered to the Legislative Council.
In a significant move, Lee revealed that stamp duties for property buyers would be slashed, marking the first relaxation of the property cooling measures, commonly referred to as “spicy policies,” since their introduction in 2010. The Chief Executive cited rising interest rates, moderated economic growth, and declining property transactions and prices as the driving factors behind this policy change.
Hong Kong’s post-Covid economic recovery has been lackluster, with diminished stock trading and sluggish residential transactions. According to reports, home prices in the city have fallen for four consecutive months, with the official housing price index down 7.9% compared to the same period last year and 4.2% lower than the peak recorded in April.
The measures announced by Chief Executive Lee are aimed at reviving the real estate sector, which has been a vital pillar of Hong Kong’s economy. By slashing stamp duties, the government hopes to encourage more buyers to enter the market and stimulate property transactions. This, in turn, is expected to boost economic activity and provide a much-needed impetus to the overall economy.
While the decision to relax the property cooling measures may come as a relief to potential homebuyers, experts warn that it could also lead to an increase in property speculation and exacerbate an already overheated market. However, the government remains optimistic that the benefits of stimulating economic activity will outweigh the potential risks.
The announcement comes at a critical time for Hong Kong, which has been grappling with the aftermath of the Covid-19 pandemic and political unrest. The city’s economy, once thriving, has been severely impacted, with various sectors struggling to regain momentum. It is hoped that these new measures will inject much-needed vitality into the real estate sector and serve as a catalyst for Hong Kong’s broader economic recovery.