Mainland Chinese surge into Hong Kong property after stamp duties scrapped

After a pandemic-induced lull spanning more than three years, mainland Chinese are snapping up homes in Hong Kong, accounting for up to a third of new property sales weeks after the city removed all additional stamp duties on foreign buyers.

The surge of mainland Chinese buyers into one of the world's most expensive housing markets — reported by several property agents and developers — comes amid battered confidence in the mainland's housing market due to a debt crisis and an uncertain economic outlook.

Mainland Chinese now account for 20% to 30% of new home sales, according to estimates by realtors, with some buyers recently purchasing up to eight apartments at once.

Hong Kong in late February removed all additional stamp duties, including those for purchases of second properties, as well as duties on those selling flats within two years of buying them. Foreigners, who had to pay 15% tax since October, from 30% previously, now pay around 4.25%, on par with locals.

The reversal of what was deemed an unsuccessful government push during the 2010s to cool housing prices came after Hong Kong housing prices plunged more than 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.

But even though sales have risen, prices remain suppressed as developers offer discounts to clear inventory. S&P Global Ratings estimated transaction volumes this year would recover only moderately from 2023, as interest rates remain high.

Property remains a mainstay of the Hong Kong economy, and the share of purchases by mainland Chinese climbed to 17%, a record high, in the fourth quarter of last year, research by realtor Midland Realty showed.

The increase coincides with a bid by the Hong Kong government to