The financial secretary stated on Thursday that the number of unsold apartment units has soared significantly since 2017. He believes a tax will be required to target specific properties and slow down the housing market and force developers to unlock these vacant homes that they are hoarding.
This hoarding has made things increasingly difficult in one of the most expensive marketplaces, Hong Kong. Problems have also been contributed by favored developers who will only sell new units in batches which will cause the increase in home prices when finally released.
Bloomberg Intelligence Property Analysts said the Wheelock & Co only put half their available units on the market in a luxury area. They sold one unit for $179 million which is a record high for the per square foot development. Another developer has only released approximately 430 units out of 1,188.
It is believed that if Hong Kong had a tax on unsold apartment it would be very much like the system used in Singapore which places penalties on developers who are hoarding properties. Other areas have taken different steps to curb the market including taxing foreign buyers who leave their homes unoccupied for 6 months or longer.
The Financial Secretary’s comments were publicized just around the time Hong Kong’s leaders had fallen under great criticism for failing to control this out-of-control market. While some people believe this situation is a top priority, others believe nothing has actually worked to solve the problem.
Critics believe that Hong Kong’s only concern is for developers keeping unsold units, making the market even more difficult for buyers to penetrate.
Source: Bloomberg
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