_Primary sales gained momentum as Hong Kong market digests pull factors

Despite another interest-rate rise in the US, residential sales rose another 44% month on month in March 2017, with a comeback of both sellers and buyers, along with the absorption of the negative impact of the Stamp Duty rate rise last November. An abundance of new flats were launched during the month, with developers offering various sweeteners to boost sales.

April 21, 2017

Although the secondary market remained relatively quiet, a number of record-breaking deals were recorded, resulting in further growth in home prices. Official data show that home prices went up in the 11 months ending February 2017, gaining an accumulated 15%.

The government’s announcement in April of a 15% stamp duty levy on first-time homebuyers purchasing multiple flats in one go is not expected to drag down home prices, as these transactions make up less than 5% of total sales. Some developers could offer further sweeteners to counter the impact of the levy.

The latest figures from the Rating and Valuation Department reconfirmed increasing housing completions in the coming years. While abundant supply and interest-rate rises will help suppress price growth, high land prices and strong housing demand will lend support to home prices, which are expected to rise a mild 5% in 2017.