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HONG KONG, June 13, 2013 /PRNewswire/ -- Earlier this year, RICS (Royal Institution of Chartered Surveyors) submitted their opinions and recommendations to the HKSAR Government regarding Government's policies to discourage speculative activities in the property market, in particular the Buyer's Stamp Duty and doubling of stamp duty. RICS is of the opinion that the policies should be reviewed as they undermine Hong Kong's global competitiveness.
It is well established that Hong Kong is an important international financial centre to Asia and the rest of the world. Many institutional investors regard Hong Kong's corporate real estate as an attractive long-term investment tool, and many multi-national companies (MNCs) often choose Hong Kong as their entry point into the Asian and mainland Chinese markets.
During the RICS Hong Kong Annual Conference 2013, a number of international experts have pointed out that BSD introduces a fundamental change to Government policies which actually sends a negative signal to the overseas investors and threatens Hong Kong's competitiveness worldwide. Hong Kong's CBD is already one of the most expensive office markets in the world. Many MNCs will also look to purchase their own premises for staff accommodation. If property prices and rental levels are driven too high, Hong Kong may stand to lose its position as the city of choice for MNC's and investors looking to find opportunity in Asia.
The doubling of stamp duty effectively prevents overseas investors from entering Hong Kong's commercial real estate market. As less overseas investors and MNC's come to Hong Kong, the only possible outcome is that prices will inflate even faster. Without sufficient rental competition, rental price levels are unlikely to fall to a satisfactory level, and MNCs will become discouraged from starting businesses in Hong Kong.
MNC decision making is often heavily influenced by government policy. RICS has made clear that the Government has access to useful supply-side tools that can combat high purchase and rental prices of Hong Kong's commercial properties. While the Government is now acting to increase home supply, RICS suggests that the Government pay closer attention to the supply of commercial properties and formulate policies that carefully consider the importance of Hong Kong's international competitiveness. RICS believes that it is time for the Government to review the policies of stamp duties, and to build strategies that adequately considers all timeframes; the short, medium and long term.
In the short term, the government may consider introducing a form of 'exemption' to non-speculative acquisitions of non-residential property, or abolishing BSD for commercial properties. In the medium term, RICS suggests the Government set a timeframe to review this measure after implementation to assess its effectiveness and impact on Hong Kong's economy. For the distant future, the Government should incorporate commercial property policies that take long term effects into consideration, for example, by looking for opportunities to redevelop and upgrade existing stock in the CBD in order to provide the market with premium commercial properties.
Kenneth Kwan, Chairman of RICS Hong Kong, made the following statement: "In January this year, RICS pointed out that BSD could harm Hong Kong's prided reputation as a free market. With the introduction of doubling of stamp duty, Hong Kong's global competitiveness will likely be undermined. While RICS understands the Government's intention to discourage speculative activities in the market, RICS hopes that the Government could take the negative impacts of such policies into consideration more carefully, and introduce adjustments where appropriate with a timetable in place to abolish the policies."
About RICS & RICS Asia
RICS is the world's leading qualification when it comes to professional standards in land, property and construction. In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body that since 1868, has been committed to setting and upholding the highest standards of excellence and integrity -- providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.
The RICS Asia supports a network of over 11,000 individual professionals across the Asia Pacific region with an objective to help develop the property and construction markets in these countries, by introducing professional standards, best practice and international experience. It promotes RICS and its members as the natural advisors on all property matters. It also ensures that services and career development opportunities are provided to members.
The RICS Asia region covers national associations and local groups locating in Brunei, Malaysia, Singapore, Thailand, The People's Republic of China and the SAR Hong Kong. It also has members working across the region such as Bangladesh, Bhutan, Burma/Myanmar, Cambodia, Indonesia, Japan, Kiribati, Laos PDR, Macao, Mongolia, Nepal, North Korea, South Korea, Taiwan region, The Maldives, The Philippines, Timor East and Vietnam. For more information, please visit: www.ricsasia.org.
