Stamp duty cut may boost property transactions

The move has also given home prices a boost by 2.0%

The retraction of stamp duties might increase property transaction volumes, Nomura reported.

Whilst the Centa City Leading Index states that home prices rose by 2.0% in the first two weeks following the termination of additional stamp duties, Nomura said economic conditions could still lead to a decline in home prices, adding that prices have fallen 0.9% since the beginning of the year.

Nomura expects the CPI inflation to moderate at 2.0% in 2024, following the increase in February to 2.1% YoY from 1.7% in January, which saw price increase in alcoholic drinks and tobacco (6.1% YoY), meals out and takeaway food (3.6%), miscellaneous services (3.6%), housing (3.0%), and transport (2.3%).

In 2024, Nomura forecasts a 2.4% YoY economic growth, with more upside to emerge in 2H24, anticipating two Fed rate cuts totalling 50 basis points.

The firm also identified risks such as delayed Fed rate cuts, increasing geopolitical tensions, prolonged housing market distress, and indirect impacts of weak global demand. Conversely, the upside could come from unexpected early or faster Fed rate cuts and a recovery of China’s economy and Mainland tourists.