This is a friendly, interactive exchange of information on all Real Estate related subjects. Follow on Twitter: @RETALKS


Moderator: admin

 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 12:10 pm

Hong Kong’s government announced its first property tax targeted at overseas buyers, stepping up efforts to cool home prices as U.S. monetary easing and record- low interest rates raise the risk of a bubble.

Non-local buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang told reporters at a press conference yesterday. The government also raised a resale tax on property by about 5 percentage points and extended the period during which it will apply to three years from two.

Record low mortgage rates, an influx of buyers from other parts of China and a lack of new supply have been underpinning the Hong Kong property market, prompting Leung, who was sworn in as the city’s leader in July, to accelerate land sales and give preference to local buyers in some projects. Photographer: Brent Lewin/Bloomberg

Hong Kong is imposing its third set of property curbs in two months after home prices almost doubled over three years to become the world’s most expensive. The city’s de-facto central bank was forced to defend the currency’s peg to the U.S. dollar for the first time since 2009 this month as the Federal Reserve’s third round of quantitative easing sparked an inflow of cash into the city.

“These measures will be effective in reducing the number of transactions, but ineffective in curbing the property prices,” said Cusson Leung, a Hong Kong-based property analyst at Credit Suisse Group AG. “The non-local buyers’ stamp duty is more of a PR stunt as it responds to Hong Kong homebuyers’ demand to raise the barrier for foreign investors.”

Record low mortgage rates, an influx of buyers from other parts of China and a lack of new supply have been underpinning the Hong Kong property market, prompting Chief Executive Leung Chun-ying, who was sworn in as the city’s leader in July, to accelerate land sales and give preference to local buyers in some projects.

Property owners who sell their homes within six months of their purchase will need to pay a 20 percent special stamp duty, up from 15 percent, Tsang said. For resale between seven months and 12 months, the duty will increase to 15 percent, and transactions between 13 months to 36 months, the duty will be 10 percent.

Prices of small to medium-size apartments have advanced 21 percent this year, raising concerns about affordability, he said.

The surge in property prices is out of sync with the economy where exports and retail sales have been declining, Tsang said.

“The low-interest rate environment will likely continue and Hong Kong property prices are likely to climb,” he said. “The property bubble is likely to increase the risks” to the economy and people’s livelihoods, he said.

Non-local buyers account for 19.5 percent of total sales of first-hand properties in Hong Kong in 2011 and 6.8 percent of total sales of second-hand properties in 2011, Tsang said.

Hong Kong joins Singapore in efforts to cool soaring property prices by targeting non-residents. Singapore in December imposed an additional 10 percent stamp duty on foreigners and corporate entities.

Hong Kong’s central bank tightened mortgage lending on Sept. 14 after saying the Fed’s latest quantitative easing risks pushing up home prices that have already surpassed their October 1997 peak. That marked the start of a 70 percent decline to August 2003, according to an index compiled by Centaline Property Agency Ltd. They have soared more than 240 percent since that trough nine years ago.

Leung said on Sept. 6 he will restrict homebuyers of two building sites the government plans to sell to local residents, a week after announcing a 10-point package to rein in prices including making more land available to developers and speeding up the building of public housing.

Hong Kong home prices have risen 18 percent this year, according to the Centaline index. They fell 4 percent in the last three months of 2011, the biggest quarterly drop since the global credit crisis, after mortgage restrictions and as China’s economy began to slow.

Buyers from other parts of China made up 36.8 percent of all new sales by value in the first quarter, down from 37.9 percent in the previous three months, according to Midland Holdings Ltd. (1200) The proportion reached 53.9 percent in the third quarter last year, the realtor said.

The city’s home prices are 65 percent higher than Tokyo’s, the world’s second-priciest place to buy a home, according to a study by Savills Plc published last September that compares prices in 10 global cities including New York and London.
 
vanpro
Real Estate Talker
Posts: 1863
Joined: Fri Sep 04, 2009 12:32 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 12:30 pm

Even hyper-bulls Cam Muir et al say Chinese and foreign buyer influence in Greater Vancouver housing markets is a myth (and also confirming my previous comments that just because buyer is Chinese doesn't mean they are recent immigrant - Chinese have been here for DECADES and are locals with local incomes):

"Industry experts have estimated the proportion of foreign buyers in the Vancouver region’s housing market at 1 to 3 per cent, said Cameron Muir, chief economist at the B.C. Real Estate Association. The perception of offshore money pouring into the area to acquire properties without foreigners even visiting them has been overstated, Mr. Muir said Tuesday, adding that many investors arrived in Canada several years ago. Here is one case in point. Mr. Liu’s father, Kevin, immigrated to Canada from China in 1999 and has been a Canadian citizen for the past decade. "

http://www.theglobeandmail.com/news/bri ... le4633625/

(Credit to SethM for posting this article on another thread)
 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 12:35 pm

Vanpro, hide your ego somewhere. those mainlanders who own 2 million dolloars houses on the west side are not foreigners. They are landed immigrants with Canadian ID. You pick the wrong cherry again. yes they arrived a few years ago, they are still mainland chinese.
 
vanpro
Real Estate Talker
Posts: 1863
Joined: Fri Sep 04, 2009 12:32 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 12:42 pm

Vanpro, hide your ego somewhere. those mainlanders who own 2 million dolloars houses on the west side are not foreigners. They are landed immigrants with Canadian ID. You pick the wrong cherry again. yes they arrived a few years ago, they are still mainland chinese.
Not my quote above - it is hyper-bull Cameron Muir stating that its a myth that Mainland Chinese/offshore buyers have significantly influenced Vancouver housing. And, I didn't say the % of Mainland Chinese buyers was zero - just way smaller than the myth you and others choose to believe. Why don't you call Mr. Muir and provide him with your evidence that his number of 1% to 3 % is way too low - remember to provide your back-up, not just your blind faith....
 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 12:46 pm

So Vanpro, Chinese are not influencing Vancouver housing market according to your mouth, answer this question, what is the root cause that drive Vancouver housing prices one of the most expensive in the world? show me your math. You have been avoiding this quesiton. Can you answer it?Chinese in Vancouver are not foreigners, of course they are not counted as foreigners buying. They have the same right as you.
 
timber2012
Real Estate Talker
Posts: 1730
Joined: Fri Dec 16, 2011 10:50 am
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 2:58 pm

I'm going to have to disagree with vanpro on this one. Even if foreigners make up only 3% of the sales, foreign money is probably far greater.

If someone sends their kids to Canada to get an education and buys them a $2.5M home in Pt Grey to live while they attend UBC... the title statement may say local...but the money sure isn't.
George Carlin once said "Think of how stupid the average person is, and realize half of them are stupider than that.”
 
Taipan
Real Estate Talker
Posts: 3574
Joined: Fri May 30, 2008 11:24 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 4:41 pm

..
Last edited by Taipan on Mon Aug 12, 2013 3:43 am, edited 1 time in total.
 
vanpro
Real Estate Talker
Posts: 1863
Joined: Fri Sep 04, 2009 12:32 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 4:46 pm

timber and unicas:

Cam Muir's 1%-3% estimate takes into account the origin/source - in the quote above he is saying that most Chinese buyers have been resident here for a decade or longer when they immigrated from Hong Kong etc...And yes, there is b/w 1%-3% according to Cam Muir et al that fall into your examples.

Bob Rennie made similar statement a year or two ago (that confirms Cam Muir's estimate: Rennie said higher % in Van West from Mainland China for sure, but overall Greater Vancouver % is very low and condos is "less than 1%" from offshore).

Unicas: not from my "mouth", but that of hyper bull Cam Muir. I just posted his quote from the article. Happens to confirm my previous comments.

I have provided sources to back up my claims (i.e. Cam Muir and Bob Rennie, both of whom have access to ALL of the relevant data). You guys have provide no such backup, just your belief that high prices MUST BE due to rich foreigners.

Unicas: the answer is clear: pure and extreme irrational bubble buying by locals using cheap money fueled by irrational psychology of: (1) prices are going up so they will always go up (in part due to myth of "rich foreigners") , so jump on the band wagon and (2) irrational fears of being priced out. That's why unaffordability has hit all time highs.


EXACTLY the same irrational psychology and "reasons" to buy at unaffordable prices was present in the rest of the world housing booms (US, UK, Eurozone etc...) and even during previous booms in Vancouver's own history - i.e. price bubble of late 1980's/early 1990's that resulted in extreme unaffordability based on local incomes and then subsequent bubble pop in mid 1990's.
 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 5:15 pm

Vanpro, you edited Cam Muir quote, he did not say mainland Chinese counted 1-3% of Vancouver's total number of homebuyers, he said foreign buyers, you made it up. You edited Bob Rennie too, he said those people who lined upt to buy cambie and marine have local IDs, you quoted him as saying no mainland Chinese, why dont you quote his comments back in 2010 reflecting mainland chineses impact on the west side. that 80% of houses sold west of granville are to buyers with mainland Chinese last names

http://www.rennie.com/documents/2010NOV ... SPEECH.pdf

And he tagged it 90% of $2 million and more homes go to buyers with mainland Chinese last names as recently as Feb this year.

http://www.biv.com/article/20120313/BIV ... -vancouver

When Lancor issued report in 2011 showing 74% of buyers in homes in Vancouver West have mainland Chinese last name,

http://www.property-report.com/chinese- ... tudy-14545

you denied report as myth? what the H you know about Chinese names for you to be in position to say that?

You claimed numerous times mainland Chinese can not afford Vancouver homes because they find $25 lunch expensive. you know It is retarded comment and since then you have worked your A$$$ off defend your position to the point not just misquote but intentionally cherry picking to say the least or lie. Your character is on the line, not just your manhood, or you may have hidden in a hole you digged for the past decade, if this is the case, no charater issue, I apologize.
 
vanpro
Real Estate Talker
Posts: 1863
Joined: Fri Sep 04, 2009 12:32 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 6:53 pm

Vanpro, you edited Cam Muir quote, he did not say mainland Chinese counted 1-3% of Vancouver's total number of homebuyers, he said foreign buyers, you made it up. You edited Bob Rennie too, he said those people who lined upt to buy cambie and marine have local IDs, you quoted him as saying no mainland Chinese, why dont you quote his comments back in 2010 reflecting mainland chineses impact on the west side. that 80% of houses sold west of granville are to buyers with mainland Chinese last names

http://www.rennie.com/documents/2010NOV ... SPEECH.pdf

And he tagged it 90% of $2 million and more homes go to buyers with mainland Chinese last names as recently as Feb this year.

http://www.biv.com/article/20120313/BIV ... -vancouver

When Lancor issued report in 2011 showing 74% of buyers in homes in Vancouver West have mainland Chinese last name,

http://www.property-report.com/chinese- ... tudy-14545

you denied report as myth? what the H you know about Chinese names for you to be in position to say that?

You claimed numerous times mainland Chinese can not afford Vancouver homes because they find $25 lunch expensive. you know It is retarded comment and since then you have worked your A$$$ off defend your position to the point not just misquote but intentionally cherry picking to say the least or lie. Your character is on the line, not just your manhood, or you may have hidden in a hole you digged for the past decade, if this is the case, no charater issue, I apologize.
Unicas, you are an accountant so you should understand that if 1%-3% = all foregin buyers and Mainland Chinese are a sub-set of foreign buyers, therefore Mainland Chines are far less than 1%-3% by your own analysis of Cam Muir's comments.

I said above that Van West % Mainland Chinese is higher than the market as a whole (i.e. all of Greater Vancouver), but overall Cam Muir says it still only works out to 1%-3% foreign buyers for the whole market.

Rennie's myth quote is right here (as well as MAC Marketing that corroborates the low % of foreign buyers):

http://www.westerninvestor.com/index.ph ... -the-house

"But even then, speaking to the Urban Development Institute in May 2011, condo marketer Bob Rennie observed that for the Lower Mainland as a whole, 2,500 condos are foreign-owned (or approximately 1.2 per cent) based on where assessment notices are sent. And foreign buyers of single-family homes are equally few, at just 607 (or 0.15 per cent of the regional total).
Another measure comes from MAC Marketing Solutions, which issued a report in June noting
that of 500 buyers surveyed in the first five months of this year, just three listed an address in China as their primary residence."

So that's Bob Rennie, MAC Marketing and Cameron Muir all stating the exact same 1%-3% foreign buyer number.
 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 7:13 pm

Vanpro, do Iranians buy up North Vancouver? East Indians own most of Newton Surrey? Koreans buy up Coquitlam? Are they sub section of foreigners? or are they immigrants? You have close to a million people in this city who dont even speak English at home, that are sub sections of foreigners? is that what you are saying? You play with words again. weak weak weak
Last edited by unicas on Sat Oct 27, 2012 5:21 am, edited 1 time in total.
 
Taipan
Real Estate Talker
Posts: 3574
Joined: Fri May 30, 2008 11:24 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Fri Oct 26, 2012 7:20 pm

..
Last edited by Taipan on Mon Aug 12, 2013 3:44 am, edited 1 time in total.
 
IKnow
Real Estate Talker
Posts: 311
Joined: Mon Oct 09, 2006 12:37 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Sat Oct 27, 2012 7:08 am

Even hyper-bulls Cam Muir et al say Chinese and foreign buyer influence in Greater Vancouver housing markets is a myth (and also confirming my previous comments that just because buyer is Chinese doesn't mean they are recent immigrant - Chinese have been here for DECADES and are locals with local incomes):
Vanpro, don't know why you keep like arguing the non mainland china factor.
It's beyond me how that may stroke you the right way.

Money or rumors from mainland china are catalysts for local Vancouver ethnic chinese to act, often impulsively and too exuberantly, on real estates speculation.
How can you write off such a link is again completely beyond me.

Take one example:
ethnic Chinese usually don't favor Surrey.
People from Punjab India often favor Surrey.
There are similar headcounts between ethnic Indians and Chinese in Metro.
Surrey house prices in the past decade basically only track inflation, no crazy happy rises like in Richmond Burnaby Port Moody etc
Vanpro, what conclusion can be drawn?
 
vanpro
Real Estate Talker
Posts: 1863
Joined: Fri Sep 04, 2009 12:32 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Sat Oct 27, 2012 7:26 am

Money or rumors from mainland china are catalysts for local Vancouver ethnic chinese to act, often impulsively and too exuberantly, on real estates speculation.
Exactly what I have been saying....for the most part it is local money (and that is using LOCAL INCOMES and LOCAL WEALTH as confirmed by Rennie, Muir and MAC above) speculating irrationally (or as you put it "too exuberantly" ) - that is the very definition of an irrational bubble that is unsustainable because prices have become way too detached from local incomes/wealth...
 
IKnow
Real Estate Talker
Posts: 311
Joined: Mon Oct 09, 2006 12:37 pm
Contact:

Re: H.K. Imposes Property Tax on Non-Locals

Sat Oct 27, 2012 9:35 am

Money or rumors from mainland china are catalysts for local Vancouver ethnic chinese to act, often impulsively and too exuberantly, on real estates speculation.
Exactly what I have been saying....for the most part it is local money (and that is using LOCAL INCOMES and LOCAL WEALTH as confirmed by Rennie, Muir and MAC above) speculating irrationally (or as you put it "too exuberantly" ) - that is the very definition of an irrational bubble that is unsustainable because prices have become way too detached from local incomes/wealth...
But your posts seem to imply that mainland China HAM has very small effect.
That is flatly wrong.

HAM from China and local ethnic chinese attitude must be tightly knotted together, and combined they hugely inflate the housing bubble here and place like Toronto.

Who is online

Users browsing this forum: Bing [Bot] and 13 guests