(Adds government, analyst quotes and share price rally)
* Home upgraders would have additional time to sell old
property - government
* First easing of cooling measures since steps imposed
* Property registration in 2014 will raise by 10 pct thanks
to easing - Midland Reality
By Yimou Lee
HONG KONG, May 13 The Hong Kong government said
on Tuesday it needs to keep the city's property measures intact
due to tight supply, although it proposed giving residents who
wish to upgrade more time to sell their old homes in a bid to
save on additional taxes.
The proposed scheme exempts residents who wish to upgrade
their homes from paying stamp duty of as much as 8.5 percent if
the old property is sold within six months of signing a formal
agreement, rather than when the preliminary deal is agreed.
Such a move would mark the first easing of cooling measures
imposed in the former British colony in February last year to
rein in sky-high property prices after a series of other steps
failed to have a sustained impact.
Hong Kong's property prices have risen nearly 120 percent
since 2008 on the city's ultra-low interest rate environment,
tight supply and abundant liquidity.
"We propose to relax the six-month limit for home buyers who
are going to buy a home before they sell," Chan Ka Keung,
secretary for Financial Services and the Treasury, said after
the stock market closed on Tuesday in a widely anticipated move.
He declined to give a time frame for the proposed scheme.
Hong Kong's powerful property developers have been hit hard
by a series of cooling measures imposed since October 2009, with
many forced to cut prices in a bid to meet sales targets in one
of the world's most expensive real estate markets.
Speculation of the slight easing triggered a rally in Hong
Kong property stocks on Monday that extended into Tuesday.
Shares of Cheung Kong Holdings, controlled by
billionaire Li Ka-shing, closed up 1.5 percent on Tuesday, while
New World Development gained 2 percent, Henderson Land
rose 1.7 percent and Sun Hung Kai Properties Ltd
was up 0.4 percent.
BOOST TO HOMES SALES
Analysts said the concession on double stamp duty would give
upgraders an extra one to two months to sell their old property
and could modestly boost new home sales in the city.
In anticipation of the move, the city's leading property
agency Midland Reality on Tuesday raised its forecast for new
home registrations in 2014 by 10 percent to 13,000 transactions,
expecting stronger demand for bigger apartments from upgraders
following the easing policy.
"For the developers, it will be easier to sell bigger-size
residential units " said Thomas Lam, head of research in Greater
China at Knight Frank. "It's an extra opportunity for existing
The Hong Kong government's cooling measures have included a
15 percent property tax on foreign buyers, mortgage restrictions
and taxes on quick resales.
No real impact had been seen until February 2013, when Hong
Kong doubled stamp duties on residential transactions to as much
as 8.5 percent of the sale to prick the city's property bubble.
The number of properties sold in Hong Kong fell by more than
a third last year to a 17-year low as a surge in sales tax
turned off buyers.
However, steep discounts offered by developers have
attracted some first-time buyers back to the market, with new
home transactions rising 28.5 percent from a year earlier to
HK$32 billion in the first quarter of 2014, according to
Centaline Property Agency.
(Additional reporting by Donny Kwok; Editing by Anne Marie
Roantree and Matt Driskill)