Tag Archives: hong-kong
Demand for smaller units remains robust in Hong Kong property market
The new build residential real estate market in Hong Kong remained robust in December with small to medium sized units continuing to be sought after, the latest property market report shows. Overall during 2014 some 63,807 residential sales were recorded according to the Land Registry, an increase of 25.9% from 2013 and the first rebound since 2011 after cooling measures were implemented. The report from international real estate firm Knight Frank also shows that luxury residential sales over HK$10 million or above rebounded by almost 50% year on year, to reach a total of 7,778 sales in 2014. The firm points out that this robust trend has extended into 2015 when developers remained active in launching new projects, particularly small to medium sized units. The report also says that in order to tackle Hong Kong’s housing shortage, the government has proposed to increase private home supply to 19,000 units per year in the coming decade. ‘Despite this increase, we still expect to see mild growth of up to 5% in mass residential prices this year,’ the monthly report says. ‘Meanwhile, the potential interest rate rise in the United States and the continuing implementation of government cooling measures are expected to suppress the price growth of luxury flats,’ it explains. ‘More landlords will put their apartments up for lease instead of selling, resulting in an increase in rental supply which will drag down luxury residential rents,’ it adds. The report also records that the office leasing market was quiet in December, traditionally the slowest time for the market. Grade A office rents remained stable while year on year they are up 2% in major business districts in Hong Kong, up 5% on Hong Kong Island but down 6% in Kowloon. Sales were down 37% in 2014 compared with 2013, according to official figures but sentiment increased towards the end of the year driven by demand for large office space from end users motivated by cost savings. ‘In 2015 we expect we expect to see this trend continue with increased demand, not only from large banks and insurance companies looking to own their own offices in Hong Kong, but also from small to medium sized firms seeking to buy their own work space to reduce occupation costs,’ the report explains. ‘Looking forward we expect Grade A office rents in CBD areas to remain firm or experience a modest increase of up to 5% in 2015 given the limited supply and sustained demand,’ it continues. ‘Meanwhile, rents in non core districts should remain stable in 2015 with supply abundant, especially in Kowloon East where about three million square feet of new Grade A office space is scheduled for completion this year,’ it adds. Continue reading
Singapore and Hong Kong are most expensive for foreign property investors
Singapore and Hong Kong are the most costly places for a foreigner to invest in real estate as they are subject to more property taxes, new research has found. They are more expensive as they are locations where the disparity between the tax burden on foreign and local investors reflects a ‘foreigner premium’, according to an analysis from international real estate firm Knight Frank. Cooling measures in Hong Kong amount to a 15% Buyer’s Stamp Duty and in Singapore there is also a 15% Additional Buyer’s Stamp Duty and a higher tax for foreign investors. Australia, Malaysia and Thailand also work out more expensive due to taxes which effectively amount to higher real estate tax levels for foreign buyers. In Australia, Thailand and Singapore foreign buyers acquiring a property for investment are subject to more taxes than if they were buying for their own use. On the other hand, Cambodia, Japan, Malaysia and South Korea do not impose such premium on both foreign and local investors. In the analysis, the Special Stamp Duty and Seller’s Stamp Duty in Hong Kong and Singapore respectively are found to be the most potent policies to deter property flipping. The report explains that following the global financial crisis and its significant impact on fiscal revenues for countries around the world, the global tax landscape has been rapidly changing. ‘Not only has there been more aggressive clamping down on loopholes and a pressure to improve tax governance, we are seeing more cooperation between countries on an international scale,’ it explains. The tax burden ranges between 12.6% and 15.5% in Australia mainly because stamp duty varies among states. In Cambodia, if the investor opts for a ‘hard title’ registered with the national Land Office, as opposed to a ‘soft title’ issued by local authority, he will incur the 4% transfer tax which accounts for the huge cost difference. Some markets effectively charge an investment premium, according to the report. For example, a foreigner buying a property in Australia for investment is subject to 7.4% more taxes than if he purchases it for self use, excluding income tax on rents which is not applicable to an owner occupier. For a local buying a second property for investment purposes, the premium varies considerably depending on the reference point. If the second home is for self use instead, he pays only slightly less in tax. The huge difference in premium implies that Australia taxes more on the purchase of a second property per se than on the purpose of the purchase. Similarly, the cooling measures in Hong Kong and Singapore target the number of properties owned but do not distinguish between investment and self use homes. In contrast, Thailand taxes on investment properties, regardless of the number of houses possessed. Even though Australia and Cambodia do not tax according to holding period, average annual tax burden is lower for long term ownership mainly because one off costs, namely stamp duty and… Continue reading
Cushman Says Asia Is Best Destination for Property Investments
By Kathleen Chu – Jul 18, 2013 Cushman & Wakefield Inc., the largest closely held commercial broker, said Asia is the place to be for investment opportunities amid growing interest in the region’s property market. “Interest in real estate is absolutely as high as we have ever seen,” Executive Chairman Carlo Sant’Albano, 49, said in an interview in Tokyo. “When you look at the growth profile of the world in the next several years, Asia remains absolutely critical path for growth.” Carlo Barel Di Sant’Albano, executive chairman and chief executive officer of Cushman & Wakefield Inc. Photographer: Tomohiro Ohsumi/Bloomberg Asia accounted for 47 percent of global real estate transactions last year, according to data compiled by the New York-based broker. Global property investment volume will probably exceed $1 trillion this year, the highest level since 2007, according to the data. China, Japan and Hong Kong were the top investment targets in 2012 from Asia, according to Cushman. The company, run by Italy’s Agnelli family that also controls Fiat SpA (F) , expanded its operations into Taiwan and the Philippines this year to capture the opportunities in the region. “If you want growth, Asia is the place you want to come,” said Sant’Albano. “If you want a very solid core investment, maybe more yield related rather than capital gain, you would look at Japan, London and Australia, and some of the major cities around the world.” To contact the reporter on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net Continue reading
