To promote economic recovery, Hong Kong repeals property-tightening regulations

On Wednesday, Hong Kong announced significant steps to support its faltering real estate market, including the removal of all restrictions on residential homes.

These actions are intended to support the city's economy, which is predicted to expand at a meager 2.5%–3.5% this year.

Paul Chan, the Hong Kong Financial Secretary, informed lawmakers in his annual budget that the financial hub would eliminate all additional stamp duties on transactions and waive stamp duties payable on the transfer of REIT units.

Chan announced a variety of measures spanning real estate, tourism, and financial services to entice capital, businesses, and visitors to the city as well as restore fiscal balance. Chan noted challenges including high interest rates, a complex geopolitical environment, and ballooning recent budget deficits.

Chan declared that all demand-side management policies for residential properties would be discontinued immediately, citing real estate as a longstanding economic pillar.

Chan stated that they believed that given the state of the economy and the market, the relevant regulations were no longer required, but there was still opportunity to make adjustments to better suit the real estate industry.

These include eliminating all additional stamp duties that were levied in the ten years prior to the current downturn in an attempt to cool one of the most expensive real estate markets in the world for foreign buyers, those purchasing second properties, and those selling apartments within two years of purchase.

In a related action, the Monetary Authority of Hong Kong (HKMA) modified guidelines regarding mortgage loans for real estate, increasing the maximum amount that buyers can borrow for specific purchases.

Housing prices in Hong Kong have dropped by 20% since their peak in 2021 due to a combination of political and economic factors, such as a national security crackdown that fueled a wave of emigration from the city and a slowing Chinese economy that affected prospective Chinese home buyers, who have historically driven the market.