Pressure from Beijing, looming vacancy tax will force Hong Kong's developers into faster and cheaper project launches, say analysts

By Lam Ka-sing / | September 18, 2019 2:47 AM SGT
Hong Kong's developers are coming under mounting pressure to slash their prices and offload new projects as quickly as possible, according to analysts.
The pressure is coming from two sources: a looming tax on unsold flats, and a series of Chinese state-media commentaries last week urging the Hong Kong government to boost housing by seizing land being hoarded by developers with "vested interests".
Downbeat sentiment stemming from the social unrest gripping the city and the US-China trade war has already forced developers to offer sizeable discounts on new flats.
Three commentaries published by mainland state media last week singled out unaffordable housing as a "root cause" behind young people taking to the streets in anti-government protests, and said the government should take back large swathes of rural land lying unused as a quick option to tackle the shortage of land for housing.
Meanwhile, the government last week said it would submit the The Rating (Amendment) Bill, better known as the vacancy tax bill, for vetting by lawmakers in October.
"These [two things] will speed up developers' pace of launching the projects and the prices will become even more reasonable," said Cathie Chung, national director of research at JLL. "There will be such an incentive."
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Wong Leung-sing, senior associate director of research at Centaline Property Agency, predicted an increase in the number of flats sold in October.
Eight new projects, with a total of 4,051 flats, could be launched in September and October, according to an analysis of marketing materials by the Post.
That would represent an acceleration from July and August, when only four new residential projects were put up for sale, and May and June, when six were launched.
Developers may price their new projects at 10 to 20 per...