Policy Address 20/21: Carrie Lam rolls out real estate measures, limited impact expected for most

Chief Executive Carrie Lam Cheng Yuet-ngor announced a series of long term housing measures on relieving the financial burden of enterprises and boosting housing supply, as announced in her 4th policy address today.

Mrs Lam said that the double stamp duty on non-residential property transactions would be revoked from tomorrow, 26 November to benefit the property owners immediately. The measure is expected to facilitate the sale of non-residential properties to meet financial problems arising from the economic downturn.

Hong Kong real estate experiences a contraction in the rental market this year, with the rent index decreased by 9.4% in September compared with the same period last year. 

Brilliant Properties Limited, a small-scale property company is one of the suffering businesses in the pandemic.

"Tenants could not afford the rent while owners are not willing to lower the price," said Cheuk Shik-kong, 60, owner of Brilliant Properties Limited. "Therefore, contracts were terminated," he added.

Mr Cheuk also said, the overall revenue of his company has dropped by 30 to 40% compared to the figures last year.

Much as the government would like to invigorate the real estate market with the abolishment of double stamp duty tax, property agencies considered it as an ineffective approach.

"The impact will not be significant," said Lam Wai-cheung, 43, she has been working at Cheong Shing Property for three years. "I believe the measure will have certain effects on the buying and selling of stores but it will not be obvious until the pandemic comes to an end," she added.

"Many buyers have the financial ability and intention to purchase commercial properties. What halts them from making the trade happen is not the price, but the pandemic situation," Ms Lam said.

However, Li Ching, 55, a real estate agent at Cheong Shing Property, has a more positive expectation towards the policy.

"I think it would only bring mild influences to the market but better than none," said Ms Li. "The effect will not be instantaneous." 

Yet, Mr Cheuk pinpoints that it will likely encourage the small-value commercial property transactions under HK$1.5 million.

While the government is taking action to help enterprises under the pandemic, Mrs. Lam said that the government has no plan to adjust the stamp duty rates on residential properties, given the situation of the tight housing supply and extravagant residential property prices. 

Instead, the government put the focus on increasing the housing supply in the long term and helping the families which are not eligible for Home Ownership Scheme meanwhile cannot afford private housing, to purchase a flat through the Starter Homes project.

"For the middle class and fairly well-off families, buying a flat means realising the dream of having their own homes," said Mrs Lam.

She announced the redevelopment project adjacent to "eResidence" being as another "Starter Homes" project, which will offer about 260 units in 2024. 

The first "Starter Home" project was opened for application in 2019 with only 450 units provided while 20,800 application were received, oversubscribed 46 times.

Citizens hold diverse opinions towards this novel Starter Homes Project.

U Man Chin, 61, a housewife with two children aged 20 and 22,  said that this scheme has provided incentives for her to provide financial aids to her children to buy a flat for future use.

"It usually takes 8-10 years for the government to release a certain number of units for sale, but now it is only four years," said Ms U added.

While Ms U feels optimistic about the scheme, Tam Ming-yan, 30, a marketing executive thinks that the waiting time is too long, 4-year is not acceptable for her.

"Does the government have any idea how many citizens are trying to buy a flat?" Ms Tam criticised the government "Only 260 units and 4-year waiting time For me, this measure is not attractive at all," she added.