The decision to raise stamp duty rates to 15% for all but local first time buyers in early November has led to a slowdown in sales.
Combined with the low season effect in the holiday season, residential sales fell by 47.3% month-on-month in December, with sales in all price ranges dropping.
Thanks to the robust new-build market, residential sales across the whole of 2016 dropped by only 2.3% year-on-year.
New-build sales volumes were quiet in December, with a limited number of new launches, because of the stamp duty rise. Resales were also sluggish, as developers offered preferential terms to offset the effect of the heavy tax, making these units less attractive.
However, the super-luxury sector remained resilient, with a number of major transactions recorded over the course of the month.
The Policy Address announced in January reaffirmed the government’s determination to increase the housing supply. The average annual supply is expected to reach 94,000 units in the coming 3-4 years, hitting an historic high.
Abundant supply, combined with economic and policy uncertainty, may drag down mass residential prices by about 5% this year.