The property market has experienced a notable dip in recent months, with February transactions reflecting a 12.8% month-on-month decline to 4,307 deals. However, experts anticipate a robust recovery, particularly for affordable residential units under $4 million, bolstered by government measures to stimulate demand.

Discover How Policy Changes Are Set to Reinvigorate the Property Sector

Navigating the Recent Market Fluctuations

The real estate sector has witnessed significant volatility over the past few months. In February alone, property sales dropped 12.8% compared to January, totaling 4,307 transactions. The total value of these sales also saw a substantial decrease, plummeting by 23% to reach $28.3 billion. Residential units, which accounted for the majority of these transactions at 3,200, experienced an 11.7% decline in volume and a 13.9% drop in total consideration, amounting to $23 billion.When viewed from a year-on-year perspective, however, the numbers paint a more optimistic picture. Property sales surged by 35.1%, while the total consideration increased by 25.3%. For residential properties, the sales volume rose by 34.7%, and the total consideration climbed by 20.5%. This suggests that despite short-term fluctuations, the long-term trend remains positive.

Government Measures Drive Demand for Affordable Housing

One of the key factors expected to fuel the market's resurgence is the government’s initiative to reduce stamp duty to just $100 for properties valued up to $4 million. This move is anticipated to attract a significant number of end-users who have been adopting a cautious "wait-and-see" approach. Newly married couples, in particular, are likely to be among the first to capitalize on this opportunity, as residential prices have become relatively more affordable, dropping by 27.8% from their peak levels.The reduction in stamp duty not only lowers the financial barrier for potential buyers but also injects much-needed confidence into the market. By making homeownership more accessible, especially for smaller, lump-sum units, the government is effectively addressing the needs of a broader demographic. This policy shift is expected to create a ripple effect, stimulating demand across various segments of the housing market.

Insights from Industry Experts

Eddie Kwok, Executive Director for Valuation & Advisory Services at CBRE Hong Kong, believes that the market will likely rebound in the coming months. “Despite the temporary slowdown in February, we expect to see a strong revival, particularly in the segment of properties priced below $4 million,” Kwok remarked. He attributes this anticipated growth to the government’s timely intervention and the increasing affordability of residential units.Kwok further noted that the market's resilience is evident in the year-on-year figures, which show a marked improvement in both sales volume and total consideration. This upward trajectory, combined with the reduced stamp duty, is likely to draw in buyers who were previously hesitant due to higher costs. Additionally, the fact that land register searches reached 338,037 last month indicates sustained interest in the property market, signaling that the downturn may be short-lived.

Potential Impact on Future Market Trends

Looking ahead, the impact of these policy changes could extend beyond the immediate increase in sales volumes. The introduction of lower stamp duties for properties under $4 million is expected to reshape buyer behavior, encouraging more individuals to enter the market sooner rather than later. This shift could lead to a more balanced market, where demand is spread across different price points, rather than being concentrated in higher-value segments.Moreover, the anticipated rise in transactions could have broader economic implications. Increased property sales often correlate with heightened activity in related sectors such as construction, furniture, and home improvement, potentially boosting overall economic growth. As the market stabilizes, it could also contribute to greater financial stability for homeowners, fostering a healthier and more sustainable real estate ecosystem.