Cushman & Wakefield 2024/25 Budget Response

HONG KONG SAR – Media OutReach Newswire – February 28, 2024 –

Response to the budget 2024/25 by KK Chiu, International Director, General manager, Greater China Cushman and Wakefield:

We welcome the Government’s proactive efforts in seeking land for housing development to ensure adequate supply for future public and private housing. However, historical data shows that there have been frequent delays in the completion of private housing projects. We hope that the Government can collaborate on various aspects of infrastructure development, provide incentives to developers and encourage them to proactively develop land in the New Territories to expand the supply of private housing. Regarding public housing, we hope that the government can carry out a more in-depth study to adjust current housing policies, for example by significantly tightening the allocation of social housing to the richest people, so that basic families deserving applicants who have been on the waiting list for many years can move forward quickly and resources can be used more equitably.

According to data from the Department of Census and Statistics, the number of people aged 65 and over in Hong Kong is expected to increase from 1.45 million in 2021 to 2.74 million by 2046. This demographic change indicates a significant trend to aging, with one in three citizens. expected to be seniors by 2046. The implications are profound in terms of additional pressure on social services and infrastructure. In light of this, we recommend that the government take proactive measures to address the challenges posed by the aging population. One of the main areas of intervention should be improving housing policies for older people. This can be achieved through initiatives such as allocating funds to support aging-in-place programs and drawing inspiration from successful models such as Ming Wah Dai Ha, run by the Hong Kong Housing Society. By providing suitable housing options for older people, the government can help improve their quality of life and well-being. Furthermore, to boost private sector participation in meeting the housing needs of the elderly, the government could consider implementing measures such as land premium exemption. This may incentivize private developers to participate in the development of age-friendly housing projects, thereby increasing the overall supply of suitable housing options for Hong Kong’s elderly population.

We are pleased to see the Government now taking a more proactive and comprehensive approach to attracting businesses to Hong Kong. As more than 10 key companies sign MoUs with OASES next month, we hope that the government will quickly implement its plans with these companies and create new employment opportunities, thereby helping to boost economic growth. However, given that the overall development plan for the Northern Metropolitan Area has not yet been approved by the Planning Board or endorsed by the Legislative Council, the implementation timetable remains distant. We also hope that the government will put in place new specific economic recovery measures in the short and medium term.

We welcome the Government’s initiative to promote digital transformation in Hong Kong’s retail and food and beverage sectors through the Digital Transformation Support Pilot Program. We believe further enhancements to payment systems and storefronts will help merchants serve a new wave of mainland tourists through the Individual Tours (IVS) program, improving the consumer experience with more direct and convenient services and creating new business opportunities.

We are pleased to see the Government now taking a more proactive and comprehensive approach to attracting businesses to Hong Kong. As more than 10 key companies sign MoUs with OASES next month, we hope that the government will quickly implement its plans with these companies and create new employment opportunities, thereby helping to boost economic growth. However, given that the overall development plan for the Northern Metropolitan Area has not yet been approved by the Planning Board or endorsed by the Legislative Council, the implementation timetable remains distant. We also hope that the government will put in place new specific economic recovery measures in the short and medium term.

We appreciate the government’s response to market demands by rolling back all demand management measures for residential properties. This action will facilitate an orderly adjustment of the real estate market, guiding it towards a healthier direction. Currently, three key factors are straining Hong Kong’s real estate market: high interest rates, strict stamp duty measures, and an economic slowdown coupled with stock market instability. With the government’s complete withdrawal of SSD, BSD and NRSD, we expect a boost in confidence among potential buyers, leading to increased transaction volumes and a revitalization of the real estate market chain.

In terms of house price developments, if the US Fed initiates an interest rate cut this year, we can expect to see house prices stabilize and potentially rebound from current levels at during the second half of 2024.

In the 2024/25 budget, we saw that the government provided specific and concrete details regarding the development of the northern metropolis, particularly in terms of transport and industry. We fully agree with the government’s adoption of the “infrastructure-led” planning principle, prioritizing the development of transport networks and promoting the diversity of industrial sectors. In conjunction with the development of the Greater Bay Area, this approach will effectively attract talent and businesses.

We also welcome the Government’s efforts to define development models and positioning of Hong Kong’s industries, including fishing and agriculture, biomedicine and the digital economy. These clear and specific directions help determine Hong Kong’s distinctive roles and responsibilities within the Greater Bay Area industrial chain and align with the three-year action plan issued by the National Development and Reform Commission of the Greater Bay Area. Bay. This aims to create a world-class business environment and lay a solid foundation for the development of the Northern Metropolis region.

We are pleased to see the government’s relaxation of mortgage policies for non-residential properties, as well as the increase in tax exemptions. Thanks to the cooperation of banks, investors can now choose properties with more flexibility without being limited to specific deadlines. Additionally, new owners can calculate tax exemptions based on construction costs and remaining tax obligations of previous owners, further reducing transaction costs. We anticipate that these measures will create a more flexible and favorable environment for Hong Kong’s property investment market, sending positive signals, strengthening confidence and boosting transaction volumes.

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