Buyers and sellers return to Hong Kong’s commercial real estate as anticipation of double stamp duty abolition spurs deals
- The value of property bought and sold jumped to HK$13.74 billion (US$1.77 billion) for 318 deals in the first 22 days of November, from HK$2.62 billion for 208 transactions in the same period last year
- Swire Properties sold Cityplaza One for HK$9.85 billion earlier this month
Hong Kong’s commercial and industrial property transactions more than quadrupled in value this month, helped by Swire Properties’ sale of Cityplaza One, as deals increased in anticipation of the government’s move to scrap a double stamp duty for commercial real estate.
“If the double stamp duty is removed, transaction costs will be substantially lowered,” said Marcos Chan, head of research in the Greater Bay Area and Hong Kong at CBRE. “The drop in capital values with low holding costs will create some triggers for commercial property investment.”
The uptick in real estate transactions is a respite from an otherwise browbeaten market weighed down by Hong Kong’s worst recession on record, as a fourth wave of coronavirus infections knocks a nascent recovery in economic activity off track. In abolishing the double stamp duty, first introduced in February 2013 to cool an overheating market, the government is trying to breathe life into a market where transactions never surpassed 10,000 in any year since, plunging to as few as 4,666 deals in 2019, according to Land Registry data.
The abolition was foreshadowed in August when the Hong Kong Monetary Authority (HKMA) relaxed the loans ceiling of non-residential real estate to 50 per cent of the property’s value, from 40 per cent.
