Hong Kong homes lost US$61.7 billion in value after removal of curbs: Centaline

The removal of property curbs a year ago has failed to support home prices, as the market value of private residential properties in Hong Kong was down by HK$480 billion (US$61.7 billion) since February 2024, Centaline Property said on Thursday.

Last year as part of his budget address, Financial Secretary Paul Chan Mo-po removed decade-old curbs on the property market in a drastic bid to support the ailing sector.

The withdrawn measures included the Buyer’s Stamp Duty that targeted non-permanent residents and a New Residential Stamp Duty for second-time purchasers. Also, homeowners were no longer required to pay a Special Stamp Duty if they sold within two years.

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Transactions rose immediately, as first and second-hand private residential market recorded an average of 5,387 deals every month in the second quarter, nearly 90 per cent higher than the previous quarter’s 2,873 transactions per month, according to Louis Chan Wing-kit, CEO of Centaline Property Agency.

But the improvement was short-lived, with transactions dropping back to an average of 3,017 per month in the third quarter.

In October, the city said it would relax its mortgage policies and include property investment in the New Capital Investment Entrant Scheme (CIES). In the fourth quarter, transactions rose to an average of 4,554 per month.

Chan said the total number of private residential transactions rose 32.7 per cent from a year earlier as of the end of January, though he added that the removal of the property curbs had failed to spur a recovery for home prices.

The total market value of private residential properties in Hong Kong surpassed HK$12 trillion in 2021, which translated to an average of HK$9.82 million for each property, Centaline said. That figure had dropped to HK$8.99 trillion by January 2025, which was down by nearly HK$480 billion from the HK$9.5 trillion that was recorded before the curbs were pulled.

Centaline said the per-unit reduction in property value over the course of a year – Hong Kong recently had 1.28 million private residences – amounted to an average of HK$470,000. If the reduction was measured from the property market’s peak in 2021, the per-unit decline would be as much as HK$2.83 million.

Lived-in home prices fell in December to cap three straight years of setbacks, according to data published by the Rating and Valuation Department. Prices weakened 7.13 per cent last year, following a 15 per cent drop in 2023 and a 7 per cent loss in 2022.

The cumulative drop over the past three years is the second-longest slump since official monthly records began in 1993. The 58 per cent crash from 1997 to 2003, during the Asian financial crisis and the dot-com blow-up, was the worst in Hong Kong’s housing market history. Property prices are down nearly 28 per cent from their 2021 peak, real-estate agencies said.

Looking ahead to this year’s budget address, which is expected to be delivered next week, developers and property agencies are crossing their fingers that the government would introduce supportive measures amid an unclear path for interest rates and ample housing supply, market experts said.

Stewart Leung Chi-kin, the chairman of Wheelock and the Real Estate Developers Association of Hong Kong, recently called on the government to lower the stamp duty for first-time homebuyers to help young people get into the market. He said a reduction would support the economy.

And earlier this month, the chairman of property agency Midland Holdings said Hong Kong should make changes to its cash-for-residency scheme to support the property market.

Freddie Wong Kin-yip suggested applicants to the new CIES should be allowed to include more of their property purchases in their investment requirement under the residency programme. At present, the CIES scheme requires applicants to invest at least HK$30 million in funds, stocks, bonds or other vehicles in exchange for residency.

Property was initially excluded from a list of approved assets. But in October, the government said it would allow an investment in a property bought for no less than HK$50 million to be counted towards an application, subject to a cap of HK$10 million.

More from South China Morning Post:

• Midland chief suggests property-friendly changes to Hong Kong’s cash-for-residency scheme
• ‘Difficult year’ ahead for Hong Kong developers as fading rate-cut hopes cloud outlook
• Mainland Chinese buyers to continue driving Hong Kong housing demand in 2025, analysts say
• Why home prices in Hong Kong won’t rebound despite the removal of property curbs

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