Speaking of housing prices in Hong Kong, it can be summed up in one word: high. In 2021, both housing prices and land prices in Hong Kong reached new highs, with multiple real estate records being broken. So what is the situation of housing prices in Hong Kong in 2022?

After multiple "cooling measures" by the Hong Kong SAR government and relevant departments, the Hong Kong real estate market is still in high demand: buyers continue to push up transaction records, large transactions are occurring in Central office buildings, and land auction prices are being refreshed... This has also led to a significant increase in land revenue and stamp duty revenue for the Hong Kong SAR government, becoming a happy trouble. "How to make good use of this surplus is a challenging task," said Paul Chan, the Financial Secretary of the Hong Kong SAR, in an article published on January 7.

The housing price trend chart released by Midland Realty shows that as of last November, housing prices in Hong Kong had accumulated an increase of over 11%, with an increase of about 1% in November. The average price per square foot calculated based on usable area in November was HKD 12,005 (approximately RMB 108,000 per square meter), breaking the HKD 12,000 mark for the first time, and even the Federal Reserve's interest rate hike did not have a significant actual impact on the Hong Kong real estate market.

Data source: Land Registry and Midland Realty Property Data and Research Center

Both land revenue and stamp duty revenue exceeded expectations

Unlike the mainland, Hong Kong has limited land and a housing supply that cannot meet demand, but Hong Kong is an outward-oriented city. In addition to local residents, there are also mainland residents buying houses in Hong Kong.

Currently, mainland residents purchasing property in Hong Kong not only have to pay a 15% buyer's stamp duty but also a 15% ad valorem stamp duty, with a total tax rate reaching 30% of the housing price.

To control housing prices, the Hong Kong SAR government has successively raised stamp duty rates and property loan requirements, but the demand for overseas investment and self-occupied housing has not weakened, supported by mainland buyers.

Fen Jie is one of the mainland residents who bought a house in Hong Kong. She told reporters: "My grandson was born in Hong Kong and is now a cross-border student studying in Tuen Mun. To facilitate his future studies, I bit the bullet and bought a house on Hong Kong Island, as there are more good schools there."

According to data from the Hong Kong Inland Revenue Department, in the fourth quarter of 2021, the number of properties purchased by non-local individuals in Hong Kong was only 362. However, based on an analysis of known buyer names, Midland Realty reported that the number of properties purchased by individual buyers from the mainland in Hong Kong reached 1,581 in 2021, with an average of 1,348 residential transactions per quarter in the first three quarters of last year.

Boo Siu Ming, CEO of Midland Realty's Residential Department, stated, "This group of 'new Hong Kong people' will be able to purchase properties at the standard stamp duty rate after living in Hong Kong for seven years and obtaining a Hong Kong ID card, which is expected to gradually enter the property market and form another purchasing power."