HK property sales fall to 17-year low as tax hike bites

Links to Business Times Singapore

[HONG KONG: The number of properties sold in Hong Kong fell by more than a third last year to a 17-year low as a drastic increase in tax on home sales, introduced to tackle rising prices, easily outweighed discounts offered by the city's property developers.


The total number of sale and purchase agreements concluded in 2013 was 70,503, down 39 per cent from 2012's level, according to the Hong Kong Land Registry. The value of deals dropped 30 percent from a year earlier to HK$456 billion (US$59 billion).


Forecasters expect the downturn to continue this year. With tycoons like Li Ka-shing warning of the impact on his property business, in November Deutsche Bank said Hong Kong home prices could drop up to 50 per cent over the following 12 months.


Designed to burst the city's long-term property price bubble, last February's doubling of stamp duty on residential transactions to as much as 8.5 per cent of the sale value has yet to stop the price of homes creeping up. According to property service firm Centaline Property, overall home prices edged up 3 per cent for the year, and have jumped 120 per cent since 2008.]