The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown
3 min
Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.
The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.
The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg, have increased the pressure .
The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have in some cases become forced sellers of Hong Kong real estate—dealing major damage to the luxury segment.
Hong Kong’s super luxury homes have lost more than a quarter of their value since the middle of 2022.
The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.
“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.
The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.
Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.
The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.
The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.
The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.
The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to an exodus of local residents and foreigners from the Asian financial centre.
But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong rolling out new visa rules aimed at luring talent in 2022.
The government on Wednesday vowed to attract more talent to the city from mainland China and overseas and provide services to help them settle. It also earmarked the equivalent of more than $128 million for tourism in the coming year to lure more high-spending visitors to spend the night, the budget said.
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The new Brooklyn Tower, a mix of luxury condos and rentals, rises from the historic Dime Savings Bank building.
3 min
Listing of the Day
Location: Downtown Brooklyn, New York
Price: $16.75 million
Boasting 360-degree panoramic views across New York City, this new 92nd-floor penthouse is the highest residence in Brooklyn.
The full-floor apartment stands atop the new Brooklyn Tower, which encompasses 143 condos and 398 rentals in the heart of downtown Brooklyn, said Katie Sachsenmaier, senior sales director, Corcoran Sunshine Marketing Group.
The condos begin on the 53rd floor, and the penthouses begin on the 88th floor. This one, Penthouse 92, is the only full-floor penthouse.
“The building is coming into its own now,” she said. “It feels very busy when you step into the lobby.”
Developed by Silverstein Properties, the building at 85 Fleet Street rises from the historic Dime Savings Bank building, according to a news release.
It was designed by SHoP Architects with interiors curated by Gachot Studios, and it is the borough’s only super tall skyscraper.
Penthouse 92 features custom interiors by Brooklyn-based Susan Clark of design firm Radnor, Sachsenmaier said. “Her selections have made it really beautiful. It feels very warm and inviting.”
Architectural details include 12-foot ceilings, European white oak floors in a custom honey stain, mahogany millwork, bronze detailing and floor-to-ceiling windows.
The eat-in kitchen features Absolute Black stone countertops, an island with seating, oil-rubbed bronze Waterworks fixtures and integrated Miele appliances, according to the listing.
The primary en suite bathroom showcases large-format Honed Breccia Capraia marble. There is also a separate laundry room as well as a wet bar and a butler’s pantry.
The views are spectacular, Sachsenmaier said. “If you’re standing in the living room, you take in the Statue of Liberty and all the way up through Midtown. On a clear day, you can see the planes take off at LaGuardia (Airport).”
Moving around the apartment, you see south over the harbor and then north and east over the whole city, she said.
From the front door, “you’re immediately greeted with the expansive living room and the view,” she said. “It’s really the first thing you see.”
The primary suite features a dressing room, multiple walk-in closets, two bathrooms (one with a cedar sauna) and southwest-facing windows, Sachsenmaier said. “You get those really beautiful harbour views.
The amenities will be ready by the end of summer, she said. A Life Time club will occupy the entire sixth and seventh floors, and an outdoor pool deck wraps around the dome of the bank building.
Stats
The 5,891-square-foot home has four bedrooms, five full bathrooms and one partial bathroom.
Amenities
Residents will have access to over 100,000 square feet of exclusive indoor and outdoor leisure spaces.
Fitness company Life Time will manage an array of amenities that include a 75-foot indoor lap pool, outdoor pools, a poolside lounge and atrium, a billiards room, a library lounge, a conference room, a theatre with a wet bar, a children’s playground and playroom and limited off-site parking.
The Sky Park offers an open-air loggia with a basketball court, foosball, a playground and a dog run.
Neighbourhood Notes
Downtown Brooklyn is at the centre of a number of neighbourhoods, including Fort Greene, Cobble Hill, Boerum Hill and Brooklyn Heights. The tower has access to 13 subway lines, 11 commuter trains, the city’s ferry network and 22 Citi Bike stations.
“You can walk to Fort Greene Park in less than 10 minutes,” and Dekalb Market Hall, which has a Trader Joe’s, a Target and a food hall, is “right next door,” Sachsenmaier said.
Agent: Katie Sachsenmaier, senior sales director, Corcoran Sunshine Marketing Group
