Hong Kong leader focuses on property and security in policy address (updated)

Sun Hung Kai Properties

25/10/2023 04:55

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      Economic growth of 4-5% expected in 2023
    

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      New national security laws to be tabled in 2024
    

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      Property transaction fees halved for some buyers
    

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      Stock transaction fees shaved from 0.13% to 0.1% 
    

  
 (Writes through, adding details)
    By Twinnie Siu and Clare Jim
       HONG KONG, Oct 25 (Reuters) - Hong Kong's leader focused
on bolstering the property market and stabilising the ailing
economy in his annual policy blueprint on Wednesday, while
confirming new national security laws would be enacted next year
to counter meddling by "external forces".
    Chief Executive John Lee said Hong Kong's economy, which
contracted 3.5% last year, would "resume growth this year" as
inbound tourism and consumption improved, but he noted high
interest rates elsewhere in the world posed a challenge.
    Hong Kong's economy grew 2.2% in the first half of the year,
and is expected to grow between 4.0% and 5.0% this year. 
    Lee, who was sanctioned by the U.S. government for his role
in cracking down on freedoms after mass pro-democracy protests
in 2019, also emphasized the need to further bolster national
security.
    "External forces continue to meddle in Hong Kong affairs,"
he said, without giving specifics or naming any country. 
    Despite Hong Kong's attempts to restore the city's
international reputation and lure more capital, further security
legislation including anti-espionage laws, known as Article 23,
would be enacted by the end of 2024, Lee said.
    "We should pay particular attention to those anti-China and
destabilising activities camouflaged in the name of human
rights, freedom, democracy and livelihood," he said.
    Some Western governments have criticised the ongoing
national security clamp down, which has led to the imprisonment
of many opposition democrats and closure of liberal media
outlets.
    
    PROPERTY AND STOCKS
    Turning to the property market, Lee said stamp duty, would
be halved to 7.5% from 15% for second home buyers and
non-citizen buyers with immediate effect, to help revive a
sector that is one of the economy's pillars.
    Other adjustments were made to allow some home owners to
sell properties after two years without incurring hefty duties. 
    And Lee said the government would continue to increase the
overall supply of land for public and private housing.
    The reaction from investors was lukewarm, with shares of Sun
Hung Kai Properties  0016.HK  and Henderson Land  0012.HK , two
major residential property developers, easing 0.2% and 1%,
respectively, in early afternoon trading.
    Hong Kong had tried to cool the property market during a
surge of nearly 300% in home prices in the decade to 2019.
    Since then prices have fallen 13% in the wake of
anti-government protests, the COVID pandemic, and a subsequent
braindrain of hundreds of thousands of people amid a national
security crackdown.
    In August, property prices dropped to a seven-month low amid
rising interest rates and a bleak economic outlook, and realtors
expect them to end 2023 as much as 5% down.
    "The relaxation of cooling measures is only a band-aid
solution that is unlikely to reverse the downward trend of home
prices," said Joseph Tsang, chairman of property consultancy JLL
in Hong Kong, citing the global economic downturn and interest
rate hikes as lingering factors weighing on the market.
    Lee said stamp duties for stock transactions would be
reduced to 0.1% from 0.13% to help bolster liquidity in the Hong
Kong market, and market data fees would be cut later this year
to help brokerages.
    He added Hong Kong would seek to strengthen its role as an
offshore yuan centre and bolster financial ties to China. 
    The government also plans to expand its campaign to attract
top international talent, having drawn 160,000 applicants last
year, of which 60,000 had already arrived, mostly from mainland
China.
    A new entrant scheme for investors will also be introduced
for those who invest at least HK$30 million ($3.8 million) in
stocks, funds, bonds, excluding real estate.

($1 = 7.8241 Hong Kong dollars)

 (Reporting by Clare Jim, Twinnie Siu, Jessie Pang, Donny Kwok;
Writing by James Pomfret; Editing by Simon Cameron-Moore)
 ((james.pomfret@thomsonreuters.com; +852-28436390; Reuters
Messaging: james.pomfret.thomsonreuters.com@reuters.net))