Pre-Election Property Auctions Deliver Steady Results
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Pre-Election Property Auctions Deliver Steady Results

The market was steady despite a rush of listings.

By Terry Christodoulou
Mon, May 16, 2022 9:33amGrey Clock 2 min

Capital city clearance rates were mostly steady at the weekend despite a surge in pre-election day listings and the recent increase in official interest rates.

Across the county, the national auction market reported a clearance rate of 71.4% at the weekend — similar to the 71.3% reported last weekend but lower than the 80.8% reported over the same weekend last year.

The pre-election weekend saw 2372 homes listed for auction compared to the previous weekend’s 1667 and similar to the 2401 reported over the same weekend last year.

Sydney’s auction clearance rates were steady but remain at year-low levels again. The weekend saw a clearance rate of 64.1%  — similar to the 64,6% recorded last weekend, but again slower than the 82.9% recorded this time last year.

A total of 810 Sydney homes were listed for auction on Saturday, higher than the 577 auctioned over last weekend — well below the same weekend last year’s 990.

Sydney recorded a median price of $1,690,000 for houses sold at auction at the weekend which was higher than the $1,630,000 recorded last weekend and 3.0% higher than the same weekend the previous year’s $1,641,000.

Melbourne saw a small lift in clearance rates at the weekend, up to 68.7% from the year low of 66.4% recorded the previous weekend. Both results are down on the 78.6% recorded over the same weekend last year.

The Victorian capital saw 1165 homes listed at the weekend — higher than the 767 reported over the previous weekend and similar to the 1159 listed over the same weekend last year.

Melbourne recorded a median price of $1,203,000 for houses sold at auction at the weekend which was higher than the $1,075,000 reported last weekend and also 10.1% higher than the $1,093,000 recorded over the same weekend last year.

Data powered by Dr Andrew Wilson, My Housing Market.



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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

By ELAINE YU
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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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