Hong Kong, July 16, 2014 /PRNewswire/ -- Since the Hong Kong government has introduced cooling measures to curb rising property prices in 2010, the policies have imposed strong impact not only on the property market, but also the overall competitiveness of Hong Kong. The Royal Institution of Chartered Surveyors (RICS) suggests that Hong Kong government increase supply of commercial properties through accelerating the development of core business district in East Kowloon and introducing commercial elements in the development plan of Hung Shui Kiu to cool the heated commercial property market and consider reviewing existing measures to reduce further impact on Hong Kong.
The government has introduced three stamp duties, namely Special Stamp Duty (SSD), the Buyer Stamp Duty (BSD), and the Double Stamp Duty (DSD), to curb the heated property market. Their impacts on Hong Kong's competitiveness are two-folds. To international investors who view Hong Kong's commercial property market as a long term investment tool, imposition of BSD and DSD increases investment capital and reduces the market's attraction. This will have far reaching consequences on Hong Kong's future status as a financial centre. Added to this, imposition of DSD introduces a high barrier for foreign investors to enter the Hong Kong market. Given the CBD rent in Hong Kong has already topped the world, entry barrier to the market would reduce the number of competitors, making rent less likely to reduce to reasonable levels, which may further discourage overseas companies from staying in Hong Kong.
In late 2013, RICS submitted its annual policy paper to the government which suggested a short to long term development plan to increase the supply of commercial properties in Hong Kong. The plan included acceleration of the "Energizing Kowloon East" initiative to increase business opportunities and land supply for commercial properties. In addition, RICS also suggested introduction of retail and commercial elements to Hung Shui Kiu project in Yuen Long. RICS believes the increase of commercial property supply will relieve the pressure of rising property prices at the root thereby stabilizes the property market.
Nigel Smith, Chair of RICS Commercial Property Professional Group Committee said: "The government has introduced a number of measures to curb the Hong Kong property market with the effects reflected in pricing. We urge the government to reconsider reviewing the stamp duties imposed on commercial properties to ensure Hong Kong's competitiveness. The RICS believes that rising commercial property prices can be balanced by increasing land supply and development of new core commercial business areas."
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