HONG KONG (Bloomberg) - Hong Kong chief executive Leung Chun-ying is taking additional steps to cool the world's costliest property market, where prices have rebounded after a short-lived dip.
The government raised the stamp duty to 15 per cent for all residential purchases, except for first-time buyers who are permanent residents, effective Saturday, Transport and Housing Secretary Anthony Cheung told reporters.
The new measures are expected to cool the property market, the city's Financial Secretary John Tsang said.
Hong Kong's resurgent property market poses a headache for Mr Leung, who had been touting his success in curbing prices ahead of a March vote to determine the city's leadership for the next five years.
Mr Leung has introduced a raft of measures to cool the housing market since 2012 and his record may weigh on China's decision whether to keep backing him.
The Centaline Property Centa-City Leading Index, which tracks sales in the secondary market, has rallied 13 per cent since reaching a low point in March. The index is now just 2 per cent shy of the record it reached last September.
"Market sentiment has had massive changes in the past few months," said Raymond Cheng, a property analyst at CIMB Securities who had previously forecast prices would drop 20 per cent from their peak.
Instead, home prices fell 13 per cent from their September 2015 high to the March low before starting to rise again. Mr Cheng said he now expects prices to rise between 3 per cent and 5 per cent in both 2017 and 2018.
In another sign that the property market is heating up, a unit of HNA Group Co this week outbid Hong Kong developers including Cheung Kong Property Holdings with an HK$8.84 billion (S$1.5 billion) offer to buy land in the former Kai Tak airport area, the highest price paid at a government land sale in 3 1/2 years.
"We all think pricing is crazy," said Denis Ma, head of research for Hong Kong at Jones Lang LaSalle, referring to prices paid at land auctions.
"A lot of buyers use that as evidence that the market is going to go up."