Hong Kong’s property market was in the doldrums for a long while, until the “harsh measures” were scrapped. The move has revitalized the property market, which is seeing a sharp increase in both primary and secondary sales. A robust property sector and stock market will help stimulate the economy.

In its latest Budget, the Government announced a complete withdrawal of the “harsh measures,” namely the Special Stamp Duty, Buyer’s Stamp Duty and New Residential Stamp Duty, previously implemented to curb short-term speculation. The passing of the Stamp Duty (Amendment) Bill 2024 at LegCo in April marked the end of more than a decade of demand-side management measures for residential properties. 

Following the announcement, property sales have shown some life, with buyers crowding the sales offices of new residential developments. This shows that scrapping property curbs helps release the pent-up purchasing power of investors and residents.

The Land Registry logged 3,971 sale and purchase agreements for residential units for registration in March, including 1,499 primary sales and 2,472 secondary sales – a significant increase compared with February. Robust property trading is not only good news for the sector, but also for the economy in general as a strong market will boost investor and public confidence in Hong Kong’s economic outlook.

An energetic real estate market will attract domestic and foreign property investors, while simultaneously promoting local tourism and consumption as some estate agents organize “property viewing tours” to facilitate deals.

Given that all industries are intertwined in one way or another, the removal of the “harsh measures” benefits industries such as legal and accounting services related to property trading, design and renovation, furniture and household items, home appliances and audiovisual equipment. With business booming in every trade, economic prosperity will be a natural outcome.

At a critical point on the path towards economic normalcy, the decision to scrap the “harsh measures” to restore market confidence and growth is definitely a welcome step. It shows that the Government is receptive to opinions. However, economic growth cannot be achieved at a stroke. The authorities should adopt a multi-pronged approach to consolidate our competitiveness while proactively attracting businesses and investment, as well as pursuing diversification.

Jeffrey Lam
jeffrey@jeffreylam.hk