Merrill Lynch: Stamp Duty Adjustment Boosts Hong Kong Property Market, with the proportion of second-hand property registrations between 3-4 million increasing to 24%

Since the Hong Kong budget raised the stamp duty ceiling for property values to 4 million Hong Kong dollars, properties in the 3 million to 4 million Hong Kong dollar range have benefited greatly, with the proportion of second-hand registrations in this range continuing to climb. According to analysis by Midland Realty analyst Sum Chung-hin, data from the Land Registry compiled by Midland Realty Research Center shows that the proportion of second-hand residential properties (including private and public housing) in Hong Kong valued between 3 million and 4 million Hong Kong dollars has significantly increased since February this year, from around 18.1% to approximately 23.7% in April, and further to around 24% in May (as of May 22). This marks the highest level in over 8 and a half years since August 2016, and has remained stable at over 20% for the past two months. Sum Chung-hin continued to point out that raising the stamp duty ceiling to 4 million Hong Kong dollars has significantly reduced the cost of purchasing properties valued at over 3 million to 4 million Hong Kong dollars. With rents rising while prices falling, this has attracted tenants to become homeowners, as low-priced units generally enjoy higher rental returns. This has also attracted investors to enter the market, driving up the proportion of transactions in low-priced properties. It is worth noting that as it takes time from signing the sales contract to registering with the Land Registry, cases registered in May generally reflect the market conditions in April. The recent significant decrease in interest rates may further boost the proportion of transactions in low-priced properties, which is expected to be reflected in the registration volume in the coming months.