The number of home transactions in Hong Kong fell for a third straight month in May, after the city’s government earlier this year imposed its toughest yet measures to curb prices that have doubled since early 2009.
A total of 4,276 homes changed hands last month, down 49 percent from a year earlier, according to Land Registry figures. The value of those transactions fell to HK$24 billion ($3.1 billion) from HK$47.4 billion in May 2012.
Near record low interest rates and a lack of new supply over the past decade have underpinned a 107 percent gain in home prices since the beginning of 2009, even as the government imposed several property curbs to cool demand. Hong Kong doubled stamp duty taxes in February on all property transactions over HK$2 million.
“The extra taxes are still affecting the market,” said Wong Leung-sing, an associate director of research at Centaline Property Agency Ltd., the city’s biggest closely held realtor. “We’ve seen some buyers taking advantage of the subdued sentiment but overall transactions is still at the lower end.”
Hong Kong home prices have risen for three straight weeks ended May 26, after going through its biggest decline since May 2010 during April, according to an index compiled by Centaline.
Since 2010, Hong Kong has charged an extra tax of up to 20 percent of the value of homes on buyers who resell them within three years and raised the minimum down-payment on mortgages for homes costing more than HK$7 million. In October, Chief Executive Leung Chun-ying imposed an extra 15 percent tax on all home purchases by companies and non-residents, and promised to raise land supply.
Home prices in the city may fall as much as 20 percent in the next two years, Deutsche Bank AG said in March.