As a result, more secondary homes may be put up for sale.
The six-month extension of the stamp duty rebate window is set to open the residential sales market to more players and result in more secondary homes being put up for sale, according to JLL’s residential sales market monitor.
“Existing home sellers will face more competition in selling their flats, but the pressure to lower their asking prices are likely to be offset by the upward pull in prices in the primary sales market amid improved buying sentiment,” said JLL Associate Director of Research Ingrid Cheh.
Last January, the Legislative Council extended the stamp duty rebate window from six to 12 months so that home-upgraders can enjoy a six-month leeway to sell their existing properties whilst remaining eligible to a stamp duty rebate.
However, even with the rebate extension, analysts foresee only a modest pickup in the secondary sales market as the upfront stamp duty payment acts as a high barrier to sales activity.
“Unless the government scraps away the need to pay the stamp duty upfront, transaction volumes in the secondary market should remain subdued. Developers are the likely ones to benefit from the current amendment bill, as the provided incentives can draw stronger upgrading demand to their projects on the onset,” Cheh added.
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