Salesmen march against HK property cooling measures as deals ‘dive to SARS-crisis levels’

Salesmen march against HK property cooling measures

Sunday, Jul 07, 2013



HONG KONG – Thousands of real estate agents took to Hong Kong’s streets Sunday in protest at government efforts to curb soaring property prices, saying new transaction taxes and other measures are threatening their business. “There are 37,000 agents in Hong Kong and there were only 3,000 transactions last month,” said Raymond Ho, a spokesman for the rally organisers. “The policies have frozen the market. A lot of small property agent firms will close in the future,” he told AFP.Organisers said 23,000 joined the rally while police put the turnout at 5,500. Protesters chanting slogans marched through the busy Causeway Bay shopping district before assembling at the government headquarters at Admiralty.

Home prices in the crowded city have risen by 120 per cent since 2008, and by more than 30 per cent from their previous peak in 1997.

A 900-square-foot (81 sq metre) apartment in the middle-market Tai Koo Shing estate sold for more than HK$10 million (US$1.29m) last year, after being priced at about HK$3 million in 2003.

Prices in the luxury market have been pushed up by wealthy buyers from mainland China. Hong Kong residents have also been investing in property because the local currency is pegged to the US dollar and bank interest rates are lower than inflation.

Officials say the measures to cool the market, in the form of extra stamp duties on some purchases, are aimed at stemming short-term speculative inflows.

They have so far had little effect in driving down prices but sales have dropped off dramatically.

Shih Wing-ching, co-founder of the Centaline property agency who joined the rally, said the cooling measures hindered property owners from freely selling their investments since the stamp duties discourage potential buyers.

Ho said 90 per cent of property agents received no commissions last month and the number of transactions dropped by 70 per cent since the cooling measures were introduced.

Housing minister Anthony Cheung stresed on Friday the measures were exceptional, in an apparent attempt to appease growing hostile sentiment from the business sector.

“We still feel that the market could be volatile, so we have to be very careful about any bubble risk,” Cheung told reporters. “These measures are exceptional measures under exceptional circumstances.”

Agents hit streets as deals ‘dive to SARS-crisis levels’
Hilary Wong
Monday, July 08, 2013
Thousands of real-estate agents and investors ramped up the pressure on the government yesterday as they marched in protest at property curbs that they claim are hurting their business.

They say the measures that were imposed when prices were rising rapidly – including the special stamp duty, double stamp duty and buyer’s stamp duty – do not help people become homeowners.

Instead, they added, the cooling efforts have pulled down the number of transactions to levels equivalent to that during the 2003 SARS crisis.

Organizers the Alliance of Double Stamp Duty Victims said 23,000 people marched from Victoria Park to government headquarters but police said there were only 5,500 at the rally’s peak.

The alliance said corporations with Hong Kong shareholders should not be subject to the levy on buyers and that the exemption period under the double stamp duty for owners to sell should be extended from six months to 12 months.

It also said the trade-up mortgage for residents should be relaxed and that a termination period should be set for all the measures.

Centaline Property founder Shih Wing-ching, who was at the march, estimated the double stamp duty has reduced transactions by around 65 percent.

He said the measures have not cooled the market but have instead made life very difficult for agents.

Legislator Lam Tai-fai said the double stamp duty is problematic.

“It cannot help local people to become homeowners but has adversely affected the property market as people no longer invest in properties,” he said.

Agent Kwong Kai-cheong said the government should not interfere with the free market.

“Instead, they should increase land supply and shorten the procedures of land approval to quickly relieve the housing problem,” he said.

Ma So-jing, an agent for more than 20 years, said the situation is the worst she has witnessed.

“I think it is worse than during the SARS outbreak in 2003,” she said. “The government should boost the supply of Home Ownership Scheme flats.”

In response to the demonstration, a government spokesman said if the “market is not cooled down in a timely manner, property prices will further deviate from economic fundamentals.”

He said this will lead to a “greater impact on the market and a more painful adjustment for society should there be any change in interest rates and the external environment.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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