(By Leong Yuet Kam)
Under the influence of the COVID-19 epidemic, Hong Kong's economy has further weakened, the property transaction volume has dramatically decreased, and property prices also face downward pressure. Real estate industry insiders call for the government's review and adjustment on the measures introduced in the past few years. They include three aspects. One is further relaxing the property price upper limit for mortgage insurance to HKD20 million to activate the houses exchanging. Second is reducing or even canceling the unified ad valorem stamp duty of 15% for the second house to stimulate investment intentions. And the third is the relaxation of the three-year sales prohibition period for SSD.
The property price upper limit for mortgage insurance is increased to HKD20 million.
The Chief Executive Officer of Residential Department, Po Siuming, points out that both the first-hand and second-hand property transaction volume sharply decline, and property prices face downward pressure, because of the social events in the second half of last year and the COVID-19 epidemic at the beginning of this year. Although the trading of the first-hand and second-hand properties under HKD10 million brisked up after the government relaxed the property price upper limit for mortgage insurance to HKD10 million yuan in October last year, current property market still freezes unfortunately affected by social movements and the COVID-19 epidemic.
Facing the weakening market conditions, he believes that it is time for the government to review the strict measures introduced in the property market over the past years and make adjustments. They include further relaxing the property price upper limit for mortgage insurance to HKD20 million to activate the houses exchanging. Because the relaxation to HKD10 million earlier only benefits the first housing customers. While the circulation chain for houses from HKD10 million to HKD20 million is still blocked. Therefore, he proposes to further relax the property price upper limit for mortgage insurance to HKD20 million.
Besides, the government levied a unified ad valorem stamp duty of 15% which is high for the second house since 2016, decreasing the investment intention of some investors who intend to buy an additional house and collect the rent as a pension fund. Therefore, there are many first housing transactions in the market with buyers in the name of their children, etc. He suggests the government should reduce or even revoke the 15% ad valorem stamp duty for the second house. At the same time, the three-year sales prohibition period for SSD also reduces the available houses, making it difficult for the first housing customers to enter the market, also causing the property market unhealthy. Therefore, he suggests that the government should relax the three-year sales prohibition period for SSD.
The mortgage percentage for houses over HKD10 million is relaxed.
The President of Ricacorp Properties, Liao Wai-Keung, also believes it is the right time to make adjustments to the strict market measures introduced by the government in the past. He also suggests the government to consider revoking the ad valorem stamp duty for buying the second house to stimulate the investment demand. At the same time, it is recommended that the government should relax the percentage of the mortgage for properties above HKD10 million to promote the houses exchanging. He believes that the property prices trend can stabilized and large fluctuations can be avoided if the government is willing to adjust the strict measures moderately.
The General Manager of the Sales Department (One) of Henderson property, Lam Tat-Man points out that the government should consider relaxing the strict measures to release the purchasing power of the market, especially the measures reducing or suppressing the demand from local buyers, because the epidemic has caused high downward pressure on the property market and has caused damage to other industries.
The Sales and Marketing Director of Grand Ming Group, Ngan King-Fung believes the government should adjust the housing policy according to the property market trend to stimulate market demand since the epidemic has slowed down property market transactions.
