The latest news coming out of Hong Kong, they are seriously considering imposing a tax on developers who are hoarding empty homes in order to bring down the furry in the housing market. The financial secretary told a talk show that the number of unsold units has increased significantly since 2017 which reached an all-time high over 9,500. The secretary did stress that they need to have a specific target in mind instead of attacking all properties on the market.
Hong Kong has the most expensive residential properties that have more than doubled over the past 10 years. This has caused a significant problem by not being able to keep up with the increasing demand for properties. A practice favored by developers has added to the situation by only selling new units in groups and constantly increasing the home prices during their releases.
It’s a fact that Hong Kong has always been very expensive but as of late, it seems things are getting way out of control. Sun Hung Kai Properties has only released approximately 433 units out of 1,188 and Wheellock & Co has only made half their units available on the market. They announced that one home sold for $236 million which has set an all-time high for the cost of a unit per square foot.
Hong Kong’s leaders have come under enormous criticism for not controlling the prices of homes in Hong Kong. The chief executive head of Hong Kong has stated that the housing situation is top priority but realizes that measures to calm down the prices of homes has not been working out.
Should Hong Kong proceed with implementing a tax on unsold new launch condos, it would mimic the system that is in place in Singapore which penalizes developers who are hoarding properties.
There are other cities that are taking other approaches for controlling the property costs and in particular, are targeting foreign buyers who are leaving their properties vacant for months to even years on end. Vancouver and Victoria Australia have imposed additional taxes on properties that are considered vacant for 6 months or longer and that includes Melbourne.
Popular consensus believes that Hong Kong is deliberately allowing developers to keep unsold units instead of the approaches taken by Vancouver and Melbourne. It is strongly believed that Hong Kong must take action regarding the out of control cost of units or there will be repercussions down the road.