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Hong Kong’s Paul Chan dismisses call to count homes as assets under entrant scheme

Hong Kong’s Paul Chan dismisses call to count homes as assets under entrant scheme
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Hong Kong’s Paul Chan dismisses call to count residential properties as assets under capital-attracting entrant scheme

Hong Kong’s finance chief has dismissed a proposal to count residential properties as investments under a revised entrant scheme despite house prices stabilising, citing the sensitivity of such assets to supply and demand.

Financial Secretary Paul Chan Mo-po on Monday also briefed the Legislative Council on the state of the economy and said he expected further growth throughout the year, in line with an earlier estimated annual range of 2.5 to 3.5 per cent.

The minister said that there had been a noticeable improvement in the residential property market’s atmosphere after authorities scrapped decade-old curbs.

Hong Kong logged an average of 6,300 residential property transactions per month in March and April, surpassing the average monthly figure of 4,700 recorded from 2019 to 2023, he said.

Chan also noted housing prices had increased by 2 per cent between March and April.

But the finance chief brushed off a suggestion from lawmakers such as Jeffrey Lam Kin-fung and Holden Chow Ho-ding to count residential properties as assets in applications under the New Capital Investment Entrant Scheme.

The programme aims to offer a faster route to residency for people who invested at least HK$30 million (US$3.8 million) in city stocks or other assets, excluding residential property – three times the requirement of the previous version.

Candidates must also meet the standard immigration and security requirements.

“We do not have plans to allow investment immigrants to use a portion of their total investment amount to purchase residential properties. We prefer to keep it separate as residential properties are more sensitive to supply and demand,” Chan said.

“Whether they are a foreigner or an ordinary Hong Kong resident buying our residential properties, there is not much difference especially after we scrapped all the so-called ‘spicy’ measures.”

Chan used his annual budget address in February to announce the scrapping of three forms of stamp duty, which targeted buyers who are non-permanent residents, those purchasing their second properties and homeowners reselling within two years of buying.

The revised investment entrant scheme has received more than 200 applications and about 3,000 inquiries between it launch in early March and last week.

“We welcome them to make a purchase but it will not be counted towards the required investment amount of HK$30 million as they are primarily considered as investment immigrants,” Chan said.

“We hope that they can put the investment amount into actual investments, rather than using it solely for their own residential purposes.”

He added: “Due to the complex external environment, the non-residential property market remained weak in the first quarter. Transaction activities across all major market segments further declined, and both selling prices and rental rates continued to remain relatively on the weak side.”

But Chan stressed authorities had already adjusted their land sale policy to ensure they only sold in response to market demand, while still continuing to prioritise land developments.

Financial Secretary Paul Chan also stresses authorities have already adjusted their land sale policy to ensure they only sell in response to market demand. Photo: Edmond So

Lawmaker Adrian Pedro Ho King-hong, meanwhile, expressed concerns over a worse-than-expected 14.7 per drop in retail sales value in April, asking what measures were being taken to support the industry.

In his reply to the lawmaker, Chan said: “Efforts are being made to seek an increase in the amount of duty-free goods that mainland visitors can bring back home upon departure from Hong Kong. Currently, the amount has been set at HK$5,000 for a considerable period of time.”

The finance chief said central authorities and the relevant local bureaus were still discussing and deciding on potential adjustments.

“The mainland’s support for Hong Kong’s policies is undeniable. But when promoting different policy measures, it is important to proceed steadily and step by step, ensuring a careful and systematic approach,” he said.

The minister said he anticipated further economic growth throughout the remainder of the year, as the city’s visitor capacity recovered following the Covid-19 pandemic and the government pressed ahead with promotion efforts.

“Despite challenges posed by changes in consumer patterns, factors such as increased employment income, stock market recovery and various government measures to enhance market sentiment should help drive private consumption,” Chan said.

“But an extended period of tight financial conditions may impact local economic confidence and activities.”

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