Relaxed property curbs to attract foreign homebuyers, says expert

The city’s wealthy population rose by 2.5% last year.

Hong Kong’s move to scrap all cooling measures on housing could help boost the city’s appeal to wealthy foreign homebuyers, according to Knight Frank.

To support the lacklustre residential market, the government in its budget speech on 28 February cancelled all the demand-side tightening measures for residential properties, which meant non-permanent residents would pay the same stamp duty rate as resident buyers of up to 4.25%. Sellers are also now free to sell assets at any time without incurring an extra 10% stamp duty.

“The recent budget announcement is particularly beneficial for international buyers, as they will no longer face additional financial burdens when purchasing residential properties, potentially enhancing the attractiveness of Hong Kong,” said Knight Frank Asia-Pacific managing director Kevin Coppel at the consultancy.

According to its latest Wealth Report, luxury residential sales in the world’s key markets such as Hong Kong, Singapore, Dubai, London, and New York, declined by an average of 37% year-on-year in 2023 due to high borrowing costs. 

Despite the boost from relaxed property curbs, Knight Frank’s prime price forecast for Hong Kong remained subdued with a projected 0.5% annual price growth for premium homes this year.

As a testament to its reputation as a regional wealth hub, the city saw its wealth management industry posting the fastest growth in assets under management in the five years through 2022, according to the property consultancy. 

Hong Kong also aims to add 200 more family offices to its existing 400 family offices by 2025 as part of a goal to encourage wealthy individuals to invest in the domestic market.

The number of ultra-rich individuals living in the city with a net worth of more than $30 million went up by 2.5% last year from 2022 levels, according to Knight Frank. It said the city’s ultra-high net worth population could grow by another 22% in the coming five years through 2028.