Growth in Hong Kong home prices slows after ‘spicy’ market restrictions launched

Hong Kong property prices rose at a slower pace in July and August as government cooling measures launched a year ago showed signs of taking effect, according to the latest official data.

But the runaway prices, which are among the highest in the world, still hit a record high in August despite several rounds of so-called “spicy measures” implemented by the government to try to cool the overheated market.

Month-on-month growth in prices tapered off to 0.3 per cent in July and 0.4 per cent in August, compared with 3.1 per cent in September and 2.7 per cent in October last year, housing and transport minister Frank Chan Fan said on Wednesday in a written reply to the city’s legislature.

Chan said the current property tax regime in the city had been “eminently effective in reducing investment demand”.

The Hong Kong government last November raised the stamp duty rate for non-first-time buyers to 15 per cent, up from between 1.5 per cent and 8.5 per cent previously. That was introduced on top of an additional 15 per cent stamp duty imposed in 2012 on corporate buyers and those who are not Hong Kong permanent residents.

Analysts said the measures had played a small part in the slowdown as increases in house prices had tapered off in recent months after rapid growth in the first half of the year.

Hong Kong leader Carrie Lam Cheng Yuet-ngor said existing cooling measures were just “spicy enough” and she had no intention of either relaxing or further tightening them.

Restrictions on Hong Kong property market to cool prices won’t change, leader indicates