Hong Kong Takes Drastic Action to Avert Property Slump
The city’s real-estate market has been hurt by high interest rates and mainland China’s economic slowdown
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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.
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Byron Bay’s most compelling homes have always taken their cues from the climate. They open to the breeze, dissolve the boundary between inside and out and use tropical landscaping to create privacy without shutting out the natural world.
At 17 Kendall Street, those familiar coastal ideas have been elevated into something more architectural.
The five-bedroom residence is designed around a spectacular open-air courtyard, creating a private internal landscape where glass, stone, timber and water meet. Floor-to-ceiling glazing draws natural light into the interiors while framing the heated swimming pool and established tropical gardens from multiple points within the home.
The home was originally built in 2016, but underwent a major renovation last year following its $5.3 million sale in 2023. Sotheby’s Byron Bay agent Will Phillips has a $15 million price guide.
The transformation focused on both the home’s scale and its level of detail. Soaring voids and bold architectural forms create drama, but the material palette keeps the atmosphere warm. Rich timber, natural stone and handcrafted finishes temper the contemporary lines, allowing the residence to feel calm rather than imposing.
A sculptural spiral staircase forms the architectural centrepiece, connecting the home’s different spaces while providing a strong visual counterpoint to the horizontal lines of the courtyard and pool.
The planning is centred on connection. Multiple living and entertaining areas open to covered terraces, enabling the house to expand and contract according to the occasion. Smaller spaces support quiet family life, while the principal living zones and alfresco areas can accommodate considerably larger gatherings.
At the centre, the courtyard operates as more than an impressive arrival feature. It brings light and garden views deep into the plan, provides separation between the home’s different wings and creates a protected outdoor environment for year-round living.
Accommodation comprises five generously proportioned bedroom suites supported by five designer bathrooms. Their distribution through the residence gives family members and guests a greater sense of privacy, while the tropical outlook maintains a consistent connection between rooms.
Wellness Wing
The home’s most distinctive inclusion may be its dedicated wellness wing.
A private sauna, gym, Zen room and traditional Japanese soaking bath combine to create a retreat within the retreat. Rather than treating wellness as a single-purpose gym placed in a leftover room, the design gives it a dedicated sequence of spaces intended to support exercise, recovery and quiet.
The Japanese soaking bath is especially appropriate to the home’s broader architecture. Compact, deep and designed for immersion rather than conventional bathing, it complements the restraint of the Zen room and the calming views into the garden.
Outside, the heated pool and covered dining terraces provide the more social side of resort living. Tropical landscaping creates privacy around the residence, while the courtyard design allows greenery to remain visible throughout much of the interior.
Belongil Boom
The location adds another dimension to the property. Kendall Street sits near the Belongil side of Byron Bay, within walking distance of Belongil Beach and local dining including Belongil Bistro, Treehouse, Féu and the town centre’s broader collection of cafés, restaurants and boutiques.
That northern pocket is increasingly emerging as a prestige counterweight to Wategos and the tightly held Marine Parade strip at the opposite end of Byron Bay.
Much of the most visible investment has centred on nearby Border Street and the Belongil beachfront. Hospitality billionaire Justin Hemmes has assembled four residential holdings in the neighbourhood at a reported combined cost of about $45 million. His acquisitions include a beachfront holding bought for $16 million in 2023 and a subsequent creek-front purchase.
The Block judge and interior designer Darren Palmer and his husband, Olivier Duvillard, have also moved into the precinct, paying $4.2 million for an original home with creek views.
Luxury developer and builder GRAYA has made an even larger commitment. The Brisbane group acquired a substantial Border Street beachfront site for about $20.65 million in 2024, with plans for a major trophy-home project. Part of that holding was subsequently sold in a transaction that underlined how dramatically land values have moved.
The strongest evidence came from Chemist Warehouse director Damien Gance and his wife, Sasha Robertson. The couple paid $33.5 million in cash for the beachfront residence Malia, setting a Byron Bay house-price record and surpassing the $30 million sale of Watermark at Wategos in 2023. They then reportedly spent another $20 million securing the neighbouring vacant parcel, taking their combined Belongil investment to $53.5 million.
Those transactions do not make Kendall Street directly comparable with absolute beachfront property. They do, however, illustrate the growing weight of capital and attention shifting towards Byron Bay’s northern edge.
For decades, Marine Parade at Wategos has been the region’s clearest shorthand for trophy property. Border Street and the wider Belongil precinct are now building a comparable identity, supported by larger holdings, beachfront scarcity and an expanding concentration of prominent owners.
Property details
- Address: 17 Kendall Street, Byron Bay, NSW
- Location: Near Belongil Beach and Byron Bay town centre
- Original construction: 2016
- Last sale: $5.3 million in 2023
- Renovation: Major renovation completed in 2025
- Current price guide: $15 million
- Bedrooms: Five
- Bathrooms: Five
- Key features: Central open-air courtyard, heated swimming pool, tropical landscaping and multiple indoor-outdoor living areas
- Wellness facilities: Sauna, Zen room, gym and traditional Japanese soaking bath
- Nearby: Belongil Beach, Belongil Bistro, Féu and Treehouse
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