The amount of properties sold in Hong Kong hit a 17-year low in 2013, as the number of transactions fell by 39% compared to the year before. The value of deals also dropped by 30%, despite generous discounts offered by the island’s largest developers.
In an effort to curb the rising price of real estate in one of the world’s most expensive housing markets, the Hong Kong Government doubled the sales tax on residential property in early 2013.
However, it has yet to bring costs down. According to Centaline Property, a services firm, home prices on the island went up slightly by 3% in 2013, and skyrocketed by 120% since 2008.
Many believe that this may change, having an adverse effect on the city’s property development industry.
“Since the new measure is still there, I don’t believe the worst is already over,” said Ricky Poon, the Executive Director of Residential Sales at Colliers International (Hong Kong), predicting a fall in mass-market home prices of up to 20% in 2014. “Developers will have less and less in profit margins. That’s for sure”.