Hong Kong home prices rise for first time in 11 months as removal of cooling measures boosts demand

In February, prices fell for a 10th consecutive month to their lowest level in seven and a half years. An official gauge tracking lived-in home prices slipped 1.7 per cent to 302.5, the lowest since it slumped to 296.2 in September 2016, data from the Rating and Valuation Department showed.

Property sales rose to a 10-month high in March, surpassing 5,000 deals, data from the government shows.

Sales of new and second-hand homes, parking spaces, shops, offices and industrial units jumped by more than half to 5,013 last month, the highest tally since the 5,284 property deals recorded in May last year, according to Land Registry data. From a year ago, however, the number of deals was still down by 42 per cent.

Financial Secretary Paul Chan Mo-po scrapped all cooling measures restricting property transactions in his budget on February 28, with the aim of restoring the city’s flagging fiscal health, and addressing mounting calls from the property and business sectors to ditch the decade-old measures.

The scrapped measures included the Buyer’s Stamp Duty that targeted non-permanent residents and a New Residential Stamp Duty for second-time buyers. Homeowners also no longer need to pay a Special Stamp Duty if they sell their homes within two years of purchasing it.

The Hong Kong Monetary Authority followed suit with its own easing measures. Homes valued at less than HK$30 million (US$3.8 million) are now eligible for 70 per cent mortgage financing, compared with the previous cap of 60 per cent for flats valued between HK$15 million and HK$30 million.