BSD home sales increases moderately after relaxation of cooling measures

There were 16 home sales involving BSD between November 2023 - January 2024.

The number of buyer's stamp duty (BSD) home sales between November 2023 and January 2024 moderately increased to 16 after the government's relaxation of cooling measures, data from JLL's latest Residential Market Monitor showed.

With minimal increase, expansion of new housing supply, and interest rate movement, JLL expects housing prices to continue to decline.

Historical analysis suggests that for prices to stabilise, monthly secondary residential transaction volumes need to consistently surpass 3,500; however, volumes have remained at or below 3,000 since April 2023.

JLL also expects high mortgage rates to dampen demand from investors and end-users, with the one-month Hong Kong Interbank Offered Rate at around 4.5%.

Moreover, JLL forecast developers to offer deeper price discounts on primary home sales as supply increases.

Norry Lee, senior director of the Projects Strategy and Consultancy Department at JLL, said: "The partial relaxation of cooling measures has not supported home prices, with the overall price index continuing to fall by 3.3% accumulatively in November and December 2023."

Lee also sees no significant turnaround in market sentiment for the first half of 2024 despite partial cooling measures relaxation.

Cathie Chung, senior director of research at JLL, recommended additional measures like mortgage relaxation to address growing housing needs and prevent high housing rents from impacting residents' livelihoods.